Bangladesh’s garment exports to the United States, the country’s top export destination, are facing a decline. This trend extends over the past few months and coincides with reduced apparel imports by US retailers and brands globally.
Export Numbers Reflect Decline
Data from the Office of Textiles and Apparel (OTEXA) reveals a 17.68% drop in garment exports to the US during the first quarter (January-March) of 2024, reaching $1.75 billion. This follows a similar decline of 19.24% in January-February.
Reasons Behind the Decline
Several factors contribute to the decline. US retailers are generally reducing apparel imports, not just from Bangladesh. A surge in garment exports in 2022 left US retailers with excess stock, leading to slower new purchases. Factory closures due to worker protests for a wage hike in late 2023 disrupted production and deliveries.
The US market demand for low-end garments, Bangladesh’s specialty, hasn’t fully recovered. Consumers in the US are prioritizing loan payments over discretionary spending like apparel purchases. Bangladesh’s lack of a deep-sea port and the gas and power crisis contribute to delayed deliveries.
Impact on Garment Industry
AK Azad, from a garment export company, highlights how these factors disproportionately affect Bangladesh’s low-end garment exports. He also mentions the challenges posed by high US interest rates.
Mohammad Hatem, from the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), emphasizes the impact of lead time issues on fulfilling buyer commitments.
US Retail Market
Despite the decline in apparel imports, the National Retail Federation (NRF) reports a steady increase in overall US retail sales for March 2024. This suggests consumers are still spending but prioritizing value and stretching their budgets.
Looking Ahead
The future of Bangladesh’s garment exports to the US remains uncertain. The industry must navigate a complex situation of global and domestic challenges while adapting to changing US consumer behavior.