Fashion accessories suppliers expect stable prices [Survey]

Suppliers of handcrafted fashion accessories in South and Southeast Asia generally forecast export prices to stay unchanged over the next six months. These findings are from Hinrich Foundation's consolidated survey of 90 manufacturers in Vietnam, the Philippines, India and Nepal. Taken in the first half of 2014, the poll looks at company expectations for the second half of the year.

Slightly more than one-half expect to keep quotes steady to remain profitable and draw in new customers in light of intense competition from China. The stable availability of raw materials such as cotton, canvas, nylon, bamboo and recycled materials also plays a key role behind makers' decision not to adjust prices.

A large minority, 46 percent, plan to raise quotes due to increasing expenditure on manpower and production. In India, the cost of labor has surged 13 percent in the past year as a result of high inflation rate. Steep outlay for electricity in the Philippines is affecting companies there, with spending seen to go up by an additional $0.24 per kilowatt-hour this year.

Although a considerable number of enterprises intend to push up prices, most will do so moderately in order to retain competitiveness. Close to three-fifths will adjust quotes by 5 percent or less. One-third will modify prices by 6 to 10 percent.

Nearly nine out of 10 suppliers have bright prospects in terms of overseas revenue in the next 12 months. Nearly one-fourth expect sales to surge more than 20 percent. Roughly one-third predict shipments to soar between 11 and 20 percent. About two-fifths anticipate exports to grow 10 percent or less.

The bullish stance is influenced by the sustained recovery of the US and EU economies. Within the latter, demand from Germany, Italy, France, the UK Sweden and Spain is forecast to expand significantly. Alternative markets are also seen to contribute to revenue substantially.

Market expansion efforts will predominantly concentrate on the EU as 40 percent of respondents will target this destination. The improved financial situation in major member countries is expected to strengthen exports to the trade bloc. Makers will also emphasize the Asia-Pacific region and North America as each is predicted to account for nearly one-fourth of overall share. Within the former, demand will mainly be driven by customers from Australia, Japan, South Korea and China.

Among manufacturers interviewed for this survey, two-fifths are based in India. The rest come equally from Vietnam, the Philippines and Nepal.