Mexico's textile industry lost 32,000 workers in 2001 but it is now on the road to recovery with more than 8,000 jobs created in the first half of this year and brighter times just around the corner, industry chiefs said on Monday.

Officials from the national textile industry chamber, CANAINTEX, said although second quarter textile output fell 2.9 per cent from the year-ago period, output was higher than the previous two quarters.

The group said the sector now employs almost 160,000 people and textile sales to Mexican apparel exporters jumped 20 per cent in the first half of 2002 to $836 million, although total textile exports slipped 1.6 per cent to $2 billion.

Apparel exports to the US fell 4.7 per cent in the first half but increased shipments to nations such as Barbados and the Dominican Republic and Barbados helped offset that slide which was blamed on the economic impact of September 11.

"The textile sector has begun to recover. It has touched bottom," chamber president Adolfo Kalach Mizrahi said.

However, he warned the country's 2,000 textile and garment enterprises would only be able to survive fierce competition from major Asian rivals such as China and Vietnam by cutting costs and upgrading technology.

He also called on the authorities to crackdown on counterfeiters and producers of fake apparel which cost the industry $10m a year as well as firms which dodge import quotas and customs duties.