This dragon isn’t sleeping
AsiaInspection Q1 Barometer
April 8th 2014
a quarterly synopsis on outsourced manufacturing
and the quality control services industry.
AsiaInspection Presents the 2014 Q1 Barometer
A leading provider of quality control services
for businesses importing from Asia, Africa, Southern Europe and Latin America
The media has been reporting that
the Chinese economy is on the brink of slowdown.
but China continues to be the dominant sourcing region by sheer volume.
December and January set new records for total exports,
surpassing $207bn in both months.1
REACH ALL-TIME HIGH
$ 207 bn
China Export Figures Per Three Months (USD Billion)
566 509 543 562 +9%
Adjusting for the Chinese New Year holiday by comparing November through January 2013/2014,
total Chinese exports increased compared with the same period in 2012/2013.
AsiaInspection figures surpassed this with year over year growth of
+12% for ordered inspections within China.
More telling and perhaps a leading indicator of the export figures to come,
March was up +26.2% compared with the year before.
Why the increase?
In Q1 the Chinese Yuan had the first major currency reprieve since 2005,
China has continued to preserve a healthy balance of wages,
a developed infrastructure and the world’s largest workforce.
CHINA PLUS ONE
South & Southeast Asian countries
have offered opportunities to reduce labor costs.
Though their respective economies are much smaller,
emerging markets were the clear winners
in percentage growth.
Inspection Figures by Country
2014 Q1 vs. 2013 Q1
Source: AsiaInspection Inspection Figures
despite unrest in the apparel industry
which has a resulted in protests across the country
escalating in January when police fired upon protestors
Cambodia Increased 32%
people killed people wounded
In Indonesia, where the textile industry
is set to become the country’s largest export segment,
inspections were up +22%
There has been a growing awareness and demand from the consumer
not only for a high quality product, but a high quality supply chain.
AsiaInspection’s 2014 Q1 data shows a year-on-year increase
in Ethical and Manufacturing Audits in Asia
BRANDS & RETAILERS
TAKE CONTROLOF THEIR SUPPLY CHAIN
Ethical & Manufacturing Audits
An increasing practice is to interweave Ethical Audit Programs with on-site product inspections
to ensure manufacturing actually occurs at an approved factory.
Rana Plaza highlighted how factories often illegally sub contract out orders after major
retailers reported that their products were never authorized to be manufactured there.
There’s notable traction taking hold in supply chains worldwide:
Governments moving forward
Corporations putting their money
where their mouths are ““
Sebastien Breteau, CEO of AsiaInspection
The American Chamber of Commerce surveyed
400 member companies sourcing from China and found that 40% have plans
to spend significantly more on ethical compliance.3
EU based companies are facing stricter guidelines
that require them to report on their policies regarding ethical issues,
corruption and the risks they pose to human rights throughout their supply chains.4
during a factory fire in Hangzhou 5
in a factory blaze outside of Shantou
in the Guangdong province 6
China has not been exempt from ethical compliance issues. In Q1:
Low cost labor intensive manufacturing is on the rise in Africa
AsiaInspection ordered inspections were up +65% year over year
The American Apparel & Footwear Association reports that
companies are choosing to invest in manufacturing
for markets such as South Africa,
closer to the destined consumer market rather than in Asia 7
Ethiopia, a leader in terms of foreign investment is aiming for an export goal of
as part of the four year Growth and Transformation Plan 8
Over the next 20 years Africa also represents
the greatest population growth potential
providing both labor and end customers to companies planning for the long term
US$ 1 billion in 2014
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YOUR EYES INTHE FACTORY™
YOUR EYES INTHE FACTORY™
1 / Trading Economics. China Exports. April 2nd, 2014
2 / CNN. At least 3 dead after Cambodian security forces open fire on protesters. January 3, 2014
3 / The Sourcing Journal Online. New Study: Costs of Compliance in China Expected to Rise. April 2nd, 2014
4 / The Guardian. EU to force large companies to report on environmental and social impacts. April 2nd, 2014
5 / China Daily. 16 dead, 5 injured in China factory fire. January 14th, 2014
6 / South China Morning Post. 11 dead, six injured in Guangdong factory blaze. March 27th, 2014
7 / Just Style. Analysis: Is Africa the next frontier in apparel sourcing?. April 2nd, 2014
8 / Just Style. Ethiopia a rising star for sourcing garments. March 6th, 2014
W W W. A S I A I N S P E C T I O N . C O MW W W. A S I A I N S P E C T I O N . C O M