Honduras could lose more maquila exports as companies shift orders to other countries

Guillermo Matamoros stated that the wage structure has cost the country competitiveness against Nicaragua and El Salvador. (PHOTO: Infobae) Honduras's maquiladora industry could close 2026 with a new contraction in its exports, in a scenario that reflects the sector's difficulties in recovering the production levels reached before the economic slowdown of recent years. Guillermo Matamoros, regional manager of the Honduran Maquiladora Association (AHM), estimated that exports from the maquiladora textile industry would register a decline of close to 10% by the end of the year. The business representative also noted that, since 2022, the sector has lost approximately 50,000 jobs. "2026 has been a very complex year. The maquiladora textile industry will probably reflect, at the end of the year, a decline of around 10% in exports. From 2022 to date, approximately, there has been a drop of 50,000 jobs," said Matamoros. The outlook represents a challenge for one of the most important industrial activities in the Honduran economy, both for its capacity to generate employment and for its share of exports and its ties to international markets. The accumulated job losses in recent years reflect an adjustment process that, according to Matamoros, began after the industry reached its highest point of production at the end of 2022. From that moment on, purchase orders began to decline amid a contraction in demand in the United States, one of the main destinations for products made by Honduran maquilas. The trend continued through 2023, 2024, and 2025, periods in which companies faced smaller orders and difficulties competing for new production contracts. One of the factors that most concerns industry representatives is the difference in operating costs compared to other Central American countries. Matamoros argued that Honduras has become more expensive for maquiladora companies, especially in terms of wages, while other markets in the region offer cost structures that, by his estimates, are more favorable for international manufacturers. "Honduras became more expensive. The other countries are cheaper. Nicaragua is around 60% cheaper than Honduras and El Salvador around 25%. Added to all the difficulties in the country's investment climate that arose at that time — and while it is true that the investment climate has improved — we feel that the wage issue is a real challenge for the industry," he said. Exports from Honduras's maquiladora textile industry are projected to fall by close to 10% by the end of 2026. (PHOTO: La Prensa) Companies that manufacture garments and other textile products usually evaluate different destinations before deciding where to place their orders, based on production costs, labor availability, infrastructure, and logistics conditions. In this scenario, Honduras faces the challenge of maintaining its attractiveness as an investment destination against countries competing for the same purchase orders. The loss of competitiveness is already having consequences on the distribution of the industry's operations. Matamoros noted that some companies have moved their activities or their purchase orders to other markets, including El Salvador, Nicaragua, and Haiti. "They have left, as I was telling you, for El Salvador, which is cheaper, has a very favorable investment climate, and has projected itself very well. Nicaragua, which despite all its difficulties is extremely cheap. Haiti, needless to say, and even the countries of Asia," Matamoros said. The decision to move orders does not necessarily mean that all companies will close their operations in Honduras. However, it represents a risk for industrial activity when international buyers choose to concentrate a greater proportion of their production in countries with more competitive costs. In the textile industry, purchase orders are of decisive importance because they allow companies to plan their production levels, keep manufacturing lines running, and define their hiring needs. When orders decrease or are moved to other markets, companies may reduce shifts, limit new hiring, or adjust their workforces. In addition to wages, the cost of electricity is among the factors affecting the competitiveness of Honduran maquiladoras. Companies are moving orders from Honduras to countries with lower production costs in the region. (PHOTO: El Confidencial) Matamoros said that companies evaluate various components before deciding where to establish their operations or send their orders, so production conditions must be analyzed comprehensively. "Companies look for or send their purchase orders to those countries where they have better conditions, and the issue of operating costs, the wage issue, and the electricity issue are crucial elements in those decisions, for sending the investment orders," he said. Electricity supply and its cost are especially relevant for manufacturing industries, which must keep machinery, equipment, and production processes running for extended periods.