Guatemala's textiles industry has lost 60,000 jobs in the past five years, according to a fresh survey from social research association ASIES obtained by just-style.

The report said China and Asia's competitive blitz coupled with the economic recession, have forced many textile firms to close shop, in spite of the purported benefits that the DR-CAFTA Central American free trade deal was supposed to bring to the industry.

According to ASIES, the sector, the country's largest exporter, cut production by 66% in the first half of 2009, idling 11,000 workers - though some of these may be hired in coming months amid expectations of a recovery.

Ruben Dario Narciso, an ASIES analyst, said the trade should improve in the second half, helped by rising orders from the US, a more favourable exchange rate and falling energy prices.

However, he noted that the US demand outlook is still highly uncertain.

"This is Central America. We depend on the US [demand] here but no-one knows exactly how much that's going to rise and how much their economy will improve in the second half," added an ASIES official.

By Ivan Castano Freeman.