Bangladesh's apparel exports growth rate apparently fell in Jul' 22

The latest data showed that Bangladesh's apparel exports in Jul 2022 were 3367 million USD, up 16.6% year-on-year but down 17.7% month-on-month. And the knitted apparel exports rose by 11.8% year-on-year but decreased by 16.9% month-on-month. Bangladesh's woven apparel exports increased by 23.1% year-on-year but down by 18.8% month-on-month.

Bangladesh's apparel exports performed well in Jul yet the growth rate slowed down gradually. Bangladesh's apparel exports were acceptable from 2018 to Jul 2019 with a certain range of increase. But it showed downtrend since Aug 2019, and shrank evidently during Mar to May in 2020, when COVID-19 pandemic was most severe. After that, Bangladesh's apparel exports saw some recovery in a small range. In particular, Bangladesh's woven apparel exports stayed in a negative territory the whole time and began to witness positive growth not until April 2021. At the same time, knitted apparel exports outperformed woven apparel, and showed stronger recovery. However, after the large increase from the second quarter last year to the first quarter this year, Bangladesh's apparel exports began to slow down in the second quarter of this year. By now, it still maintained a double-digital increase even though the high growth momentum was already ended.

The fiscal year of Bangladesh was from Jul last year to June this year. Exports of this year was sound in terms of export volumes of major categories, which accounted for over 80% of the total. Among them, pants took up the largest share, accounted for 34% in fiscal year 2021/2022, T-shirts and knitted shirts came second at about 23%, sweaters accounted for 13.2%, shirts and tops accounted for 6.5%, which had been decreasing for years. The growth rate of exports of all categories in the fiscal year 2021/2022 were over 30%, yet the totaled exports only achieved 16.6% growth in July. The growth of Bangladesh’s apparel exports is expected to move down further considering the consumption status in EU and US countries. 

During the fiscal year 2021/2022, the European Union was the most important destination for Bangladesh's apparel exports, accounting for over 50.2% of the total, up by 33.9% compared with last fiscal year. The exports to the United States reached $9billion, accounted for 21.2% of the total, and increased by 2.3 percentage points. It could be seen that, Bangladesh's apparel exports to the United States were rather strong during Jul last year to Jun this year. However, given the high inflation in the US and Fed's interest rate hike, the future economic pressure was huge. It is known that, the apparel retail inventory of US wholesaler has already hit the ceiling, and there would be less stock up. As such, the import demand from the US would weaken further, and European market would see the same trend in the near future. In all, Bangladesh's apparel exports will face no small challenge in the fiscal year 2022/2023.