Textile & Fashion

Growth in Wages Kill Profits of The Czech Textile Companies

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According to the annual report published by the Czech Association of Textile, the Czech companies had sold 56.5 billion crowns worth of textiles, clothes and fibres in the year of 2018. This turnover showed a three per cent increase compared to the year before. Yet, the company could not enjoy much profits due to the increase in the wages.

There is an estimate of 8.5 per cent increase in the monthly wages of the workers. This has greatly impacted the profits. Due to this growth in the wages, the Czech companies are having difficulty to compete against the Asian companies. Mr Hlavatý believes that this is because of the cheap labour that as available in the Asian countries.

The company presently has around 2,300 employees who help in the production of unwoven textiles needed by the agricultural and the building industries. The products are exported to 66 countries all over the world. As per the words of Jiří Česal, head of ATOK, the textile industry will see a further increase in the wages by an additional seven percent this year. After a collective agreement that was signed by the trade union, this was decided by the association.

An average wage of 25,900 crows were earned by the textile workers in the previous year. In spite of the salary growth, the rate of employment in this industry continues to fall as there are other industries who offer even better wages. Also, these industries provide their workers with some additional perks and benefits which attracts more employees to them.

This is creating a shortage of workers and forcing the industries to spend more on automation. Juta plans to invest around 10 million crowns on automation, says Hospodářské Noviny.

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