In the first quarter of 2023, ready-made garment (RMG) exports to the United States experienced a decline in value and volume due to an economic downturn.
According to the information made available by OTEXA, an affiliate of the US Department of Commerce, Bangladesh received $2.13 billion from the single largest destination of exports between January and March of 2023, representing a decrease of 13.33%, reported the Financial Express.
At the same time last year, earnings were 2.46 billion US dollars.
However, the total amount of apparel imported into the United States during the final three months of the current calendar year has also decreased by 19.73% to $19.47 billion.
During the January-March period of 2022, it was $24.25 billion. OTEXA revealed that Bangladesh’s primary competitors, China and Vietnam, both experienced declines of 34.89 percent and 24.25 percent during the same time frame.
Experts and exporters of apparel attributed this decline to sluggish demand in the United States, fueled by the economic slowdown, high inflation, and high-interest rates.
According to insiders in the industry, Bangladesh is still in a better position than its rivals, whose exports have decreased by a greater percentage.
They added that the Russia-Ukraine war affected demand, resulting in a high inventory of buyers and reduced work orders in recent months. Bangladesh also benefited from the US buyers’ shift away from China and China-plus policy.
Mahmud Hasan Khan, director of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), shared with the Financial Express, “A slowdown in the US economy, high inflation, and high-interest rates have all contributed to a decline in overall imports.”
“Bangladesh is currently going through fierce competition with its major rivals because all of them are trying to get shifting orders,” he said.
According to Md. Hatem, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), “We were receiving 30%-40% fewer work orders for the last several months due to the buyers’ huge inventory, primarily because of high inflation and interest rates there.”
The OTEXA data for the first quarter of 2022 also showed the same pattern, with shipments decreasing by 26.73% to 665.45 million square meters from 909.49 million square meters in the first quarter of 2022.
Abdullah Hil Rakib, the managing director of Brothers Fashion Ltd., discussed the situation and said that the turmoil in the US economy has slowed job growth, which has led to many people being laid off and IT workers losing their jobs.
According to Mr. Rakib, who is also a director of the BGMEA, this situation is reducing demand, particularly for apparel, and forcing consumers to make more cautious purchases. He also said that retailers in the United States bought a lot of it last year and now have a lot.
“This is the principal explanation for the neighborhood RMG area execution,” Mr. Rakib said, adding what is going on could change with the restoration of the US economy.
However, apparel exporters assert that the Russia-Ukraine conflict is primarily to blame for the decline in global demand.
They added that China’s share is decreasing due to trade tensions between the two nations, China’s zero-covid policy, and the Uyghur issue.
According to the data, China’s share of the US apparel market fell from 37.32% in 2013 to an estimated 21.75% in 2022.
However, Bangladesh’s share increased from 6.20% in 2013 to 9.75% in 2014.
During the January-Walk time of 2023, the US imported attire worth $3.46 billion from China, which was $5.32 billion during the comparison time of 2022.
Vietnam sent out attire worth $3.36 billion during the period, which was $4.44 billion in the comparison time of 2022.
Meanwhile, US apparel imports from India experienced a negative growth of 32.56% during that time, reaching $1.33 billion, while Cambodia saw a negative growth of 32.56% and made $727 million.