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Income from Albania's economy from fashion industry services marked a new historic record for the second quarter of the year.
Bank of Albania data shows that the net income of the Albanian economy from outsourcing reached 198 million euros, the highest level ever recorded for a single quarter. Income from these services increased by 9% compared to the same period last year, Monitor reports.
Even the progressive values for the first half of the year represent the highest historical levels of income from outsourcing. For six months, net income from processing physical inputs owned by others reached 394 million euros, up 16% compared to the same period a year ago.
Balance of Payments figures show that incomes from sectors related to outsourcing are higher than ever before, despite this increase in income being significantly eroded by the strengthening of the Albanian Lek in the exchange rate.
If we look at the parallel figures from INSTAT, expressed in Lek, the growth of exports in the main sectors related to outsourcing is weaker, but not alarming. The "Textiles and Footwear" group for the first 7 months of 2023 recorded a slight decrease in exports by 1.3% compared to a year ago.
The other group, "Machinery, equipment, and exchange parts," has continued to increase exports, up 8% compared to the same period last year.
The low labor cost has been and remains the main competitive advantage of Albanian exports.
For this reason, export industries are mainly concentrated in sectors that exploit lower labor costs compared to developed economies. Historically, outsourcing has been focused on the production of clothing and footwear from abroad, while in recent years, the automotive industry sector, related to the production of exchange parts for vehicles or other industrial products, has been growing.
Outsourcing is also one of the main contributors to the positive trend of the Services account in the Balance of Payments. While there is a deep deficit in goods, Albania has a positive trade balance in services.