Earlier in September, the shipment of the major exporting items posted a negative growth of 7.52%, dipping for the first time after 13 months since August last year
The readymade garment (RMG) export of the country is set to post further negative growth in October like the previous month September, as demand declines in the West due to high inflation.
According to the NBR data compiled by the Bangladesh Garment Manufacturers and Exporters Association, the country’s apparel exports experienced a downturn in the first 20 days of October by 18.67% to $1.77 billion, lower than $2.17 billion in the mentioned period of 2021.
Earlier in September, the shipment of the major exporting items posted a negative growth of 7.52%, dipping for the first time after 13 months since August last year.
According to the Export Promotion Bureau (EPB), Bangladesh earned $3.16 billion in September of 2022, down from $3.41 billion in the same period of the last year.
Apparel manufacturers said that the export witnessed negative growth due to the war-related crises, global economic turmoil, and record inflation affecting retail businesses.
A number of global brands were suffering from a decline in sales and unsold stocks, compelling many to halt current orders and production at the manufacturers’ end.
Moreover, they also predicted a few months ago, as orders are going down, the growth would be negative from September, and it has happened.
Domestic issues like power rationing, load shedding and severe gas crises also impacted the sector.
Talking to Dhaka Tribune, Mohiuddin Rubel, director of the BGMEA said that they already shared early indications of growth slowdown from September onwards, which is now reflected in export data for September.
“This downtrend may continue for the coming months as the global retail market is disrupted by many challenges and then anticipated recession in the global economy, which is halting retail sales and demand for clothing,” he added.
He also warned that if the ongoing Russia-Ukraine war prolongs, the global economic situation will further deteriorate.
“The normalcy in the global economy heavily relies on the war issue. If the war ends fast, then the situation may revive within four to five months,” he added.
Regarding the ongoing energy crisis, he said that Bangladesh should try to be self-reliant in energy by exploring gas and addressing renewable energy sources in massive aspects.
“Factories can use their rooftop to set up the solar panels,” he added.
According to the manufacturers, the apparel sector of the country is fearing another drop in orders as rising fuel prices and inflation have cut the consumers’ purchasing power in European countries and decreased the demand for clothing products.
The inflation rate in the European Union (EU), the largest destination of the country’s apparel items, reached 9.9% in September this year.
Moreover, the European countries will face further catastrophes as Russia reduces gas supply and leaks surface on two Nord Stream pipelines in the Baltic Sea, which may impact the inflation rate further in the upcoming winter and consumers may be forced to cut their shopping expenses during Christmas.
According to various projections, European shoppers are likely to reduce their Christmas purchases by up to 22% which will disallow the top brands, importers of Bangladeshi apparel products, to clear their whole stock.
Industry insiders said that the situation may not change this year and if the brands can clear most of their stocks during Christmas, only then they will place more orders.
However, they also said that the sector needs a few more months, at least till March of 2023, to recover from the losses.
In this situation, manufacturers repeatedly urged the government to ensure uninterrupted gas and electricity supply so that they can meet the demands of clients on time.
