Southeast Asian textile and apparel exports peaked down

Recently, major Southeast Asian textile and apparel exporters have announced their textile and apparel exports in May. Although the export volume and value were much higher than those of the same period last year, most of them declined compared with the same period last month, with textile and apparel exports of Bangladesh and India falling by more than 10%. Pakistani textile and apparel exports fell 5.6%, only Vietnamese one was slightly higher than last month, and the total export value of the four countries dropped by 10.3%. In addition, Bangladesh, Pakistan and Vietnam recorded their first month-on-month textile and apparel exports decline in 2022, while Indian one has declined for two months in a row.

Note: India's apparel exports in May have not yet been announced, and only May’ 22 India's textile exports are listed in the table.

In 2022, many countries are facing high inflationary pressures, especially in the major textile importers. Some analysts believe that the surge in inflation hits market confidence and leads to the decline in consumption power, resulting in a sharp drop in the Southeast Asian textile and apparel exports, which is indeed an important aspect. From the retail data of major apparel consumer countries, the European Union and Japan have not yet dropped significantly, while China and the United States have declined significantly. On the other hand, however, it has a lot to do with the improvement of the epidemic in China and the return of orders to China in May. During the most stringent period of epidemic control in many cities of China in April, the textile and apparel exports grew by only 1.4%, but rebounded up immediately after the relaxation in May, with a year-on-year growth of 20.2%. The exports of the five Asian countries in May rose by 13.4% month-on-month, so the decline in the Southeast Asian textile and apparel exports in May might not be a direct manifestation of inflationary pressure, but has more to do with the return of orders to China.

The recent inflation data released by various countries have once again aroused market concern. US’s CPI rose 8.6% in May year-on-year, a 40-year high; EU’s CPI rose 8.1% in May year-on-year, an all-time high; Japan’s CPI in May has not yet released, which is predicted to be 2.5%, the highest in seven years. US’s retail sales in May, announced in Jun 16, fell for the first time in five months, with prices rising and retail sales falling, indicating that inflation has dealt a blow to consumers' desire to spend to a certain extent. In the second half of 2022, the world has entered an interest rate hike cycle. Under the background of the epidemic and war, the risk of economic recession increases, consumption may continue to be sluggish, and the Asian textile and apparel exports will be not optimistic.