Ready-made garment exports to the United States, Bangladesh’s single-largest export market, declined by 23.33 percent year on year to $5.77 bn in the first nine months of 2023, US data show. Apparel manufacturers attributed the decline to demand fall for a combination of factors that include high inflation, the war in Ukraine and an economic slowdown in developed markets.
In terms of volume, the apparel exports to the US market also registered a 29.37-percent year-on-year fall in the three quarters (January-September) of the calendar year, according to the US Department of Commerce’s Office of Textile and Apparel (OTEXA) data released recently. The data show Bangladesh’s key competitors China and Vietnam also registered negative export growth to the US market in the period — altogether reflecting a dampened Western fashion appetite.
However, recent quality-control and supply-chain data for January-September showed Bangladesh losing US work orders while buyers inclined towards China sourcing. The country earned $7.53 bn during the January-to-September period last year, which, according to OTEXA data, is $1.75-bn higher than the earnings in the first nine months of 2023.
During the period under review, the US imported from Bangladesh 1.76 bn square metres of garments, recording a 29.37-percent fall. In the January-to-September period of 2022, Bangladesh shipped 2.49 billion square metres of clothing items, according to OTEXA data.
Overall US imports of apparel from the world during January-September 2023 declined by 22.81 percent to $60.82 bn compared to $78.79 bn in the same period of 2022, data showed. The US trade data revealed that Bangladesh witnessed a negative growth of 34.71 percent in September compared to the corresponding month of the previous year–the highest among its competitors, including China, Vietnam and India. The country shipped $594.76 mn worth of apparel items in September 2023, down from $911.07 mn in September 2022.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Faruque Hassan says they have received fewer work orders for the past several months, which is reflected in the US disclosure. “The decline in demand is due mainly to the adverse domino effects of the Russia-Ukraine war, which has spurred up inflation and interest rates,” Hassan told.
The export-industry leader fears that the negative growth might persist throughout the year 2023. On top of falling demand, manufacturers also blamed inconsistent utility supplies weighing on the production lines.
Ariful Islam Rifat, Assistant Manager (fabrics branding and marketing) at Unifill Group, says factories are suffering the most due to their inability to utilise their full production capacity thanks to the gas crunch. At least 30 percent of the factories’ capacity remains unutilised against existing work orders, he mentioned.
According to a recent report by QIMA – an inspection, audit, and laboratory-testing service provider – the global apparel-sourcing landscape has been changing this year, with global brands and retailers pushing for higher sourcing from China and lower from Bangladesh.
The agency has found inspection and audit demands by Western apparel buyers in Bangladesh having witnessed a 10-percent year-on-year decline during the January-September period of 2023, while it increased by 14 percent in China – the first increase of its kind since 2019.
According to OTEXA, Bangladesh’s key apparel competitors China and Vietnam saw negative growth of 28.13 percent and 24.13 percent, respectively, during the January-September period.
US apparel imports from China stood at $12.75 bn during the period under review, down from $17.74 bn. China exports fetched $1.76 bn in September 2023, down from $2.17 bn in September 2022, marking a decline of 18.61 percent.
Vietnam exported apparel worth $11.06 bn during the first nine months of 2023 in a decline from $14.58 bn in the same period of 2022, recording a fall of 24.13 percent.
Vietnam’s RMG exports to the US in September 2023 declined by 20.88 percent to $1.41 billion from $1.78 bn in the same period of 2022, according to OTEXA.
The data showed US apparel imports from India and Indonesia having marked 21.91-percent and 25.61-percent fall to $3.62 billion and $3.30 billion during the January-September period, respectively.
America’s imports from Cambodia fell by 26.09 percent to $2.59 billion during the period, the data showed.
