Apparel exports see surprise return to growth in October

Bangladesh’s apparel exports saw unexpected growth in October beating the weakening global economic outlook and forecast by exporters.

Data released by the Export Promotion Bureau (EPB) shows Bangladesh’s apparel exports rose by 3.27 percent to nearly $3.68 billion in October, which made many exporters surprised as they thought the negative growth that began in September will continue throughout the year.

Apparel exports saw high growth for over a year till August this year. EPB data shows in July exports grew by 16 percent, 36 percent in August and -7.52 percent in September.

“We are really surprised to see the growth at a time when many factories are facing a shortage of work orders. We expected that growth would not come back to positive territory before next year,” Shahidullah Azim, vice president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) told Business Insider Bangladesh.

It was not Azim’s prediction alone as many exporters were facing around a 30 percent decline in exports for the past couple of months.

“I cannot talk about other factories in the country. But we have cut working hours 2 to 3 hours as orders have fallen by 30 percent,” Shupolo Dewan, assistant general manager of Chittagong Denim Ltd. told Business Insider Bangladesh.

Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said a couple of days ago that garments exports may continue to witness negative growth till December this year.

Hassan was not wrong as Bangladesh’s largest export markets in the US and Europe are almost in recession as inflation is biting them more than any time before in the last few decades. Consumption and demand declined in Germany, where Bangladesh’s exports were over $7 billion in FY22, by far the highest in Europe. But this fiscal year, the growth has come down and exporters assume that the export figure hovers around $6 billion in Germany.

“October’s figure looked very exceptional and it may not continue in November and December,” said one of the largest garment exporters of Bangladesh wishing not to be named.

“Many buyers are holding shipments and deferring orders until next season,” he said.

Though garment exports returned to growth after a month, shipments from other major sectors such as agricultural products, jute yarn and twine, pharmaceuticals, bicycle and engineering products are still in the negative territory, according to EPD data.

Bangladesh’s exports grew by 41.13 percent in January 2022 to $4.85 billion, in February 34.54 percent to $4.29 billion, in March 54.83 percent to $4.76 billion, in April 51.18 percent to $4.73 billion, in May 23.24 percent to $3.83 billion, in June 37.19 percent to $4.90 billion, in July 14.71 percent to $3.98 billion and in August 36.18 percent to $4.60 billion.

As the country saw high growth in exports for months even in the pandemic time, the government set a target to export $80 billion by 2024 and $100 billion by 2026. Bangladesh’s export was $52.08 billion in 2021-22, of which apparel accounted for $42.61 billion

Bangladesh mainly exports garments, leather and leather goods, plastic goods, jute and jute goods, engineering goods, frozen fish, auricular goods, etc.