Czech textile and clothing companies have reported a growth in sales for the ninth consecutive year, the daily Hospodářské noviny wrote on Wednesday.
In 2018, Czech companies sold clothing, textiles and fibres worth 56.5 billion crowns, an increase by three percent on the previous year, according to an annual report released by the Czech Association of Textile, Clothing and Leather Industries (ATOK).
However, wages in the industry have been growing much faster, by 8.5 percent, which will in turn affect profits.
“We recorded sales of over 7.7 billion crowns last year. It was a decent year, but we worked under great pressure,” Jiří Hlavatý, head the country’s biggest textile company Juta, told the daily.
Acording to Mr Hlavatý, growing wages have put Czech companies at a growing disadvantage against Asian companies, which profit from the lower cost of labour.
The company, which produces unwoven textiles for the building industry and agriculture, currently employs around 2,300 people and exports its textiles to 66 countries in the world. According to the head of ATOK, Jiří Česal, wages in the textile industry will grow by at least seven percent this year. That is what the association guarantees in a collective agreement signed with the trade unions.
Workers in textile companies last year received an average wage of 25,900 crowns. Despite the salary growth, the employment rate in the textile industry continues to drop, due to other industries offering better wages. Last year, the number of people employed by the textile industry fell by around 1.6 percent to 32,200.
The shortage of workers is forcing textile companies to invest more into automation. According to Hospodářské noviny, Juta is set to invest tens of millions of crowns into automation this year.
Other companies are trying to attract employees by various perks, such as an annual bonus, or by introducing better conditions for mothers with children.
The growth of the textile industry is being fuelled mainly by the focus on technical textiles, which are used in the automobile industry, agriculture, health care and aviation. According to Jiří Česal, eight out of the country’s top 10 textile producers manufacture technical textile.