In spite of turbulent times prevailing both at home and abroad, garment exports from Bangladesh grew in 2024 by 7.23 percent year-on-year to $38.48 billion, according to the Export Promotion Bureau (EPB). This is due to an increasing demand for clothing with the fall of inflation in major export destinations. Last year, the local garment sector witnessed demonstrations, national election-related movements, factory closures and production halts amid massive labour unrest after the fall of the Sheikh Hasina-led administration on August 5.
Goods shipment was severely affected in July, August, September and October due to a student-led mass movement culminating in Awami League’s ouster and widespread labour unrest demanding wage hikes and an end to workplace discrimination.
On the international front, high inflation has persisted over the past few years because of far-reaching implications of the Russia-Ukraine war that began just after the pandemic, affecting consumer demand. But Western economies have been rebounding gradually with rising demand, for which retail sales have also been growing with the clearance of inventories of previous years in Europe and the US. Exports from the sector grew although many had thought that shipments would be negatively affected by domestic and external challenges.
For instance, garment exports in fact declined by 6.62 percent year-over-year to $2.38 billion in April, which came as a surprise given that the export trend was enjoying positive momentum. Similarly, garment shipments declined last June by 10.48 percent year-on-year to $2.97 billion after increasing by 1.45 percent in January and 4 percent in March.
In July, apparel exports grew by only 2.89 percent year-on-year to $3.17 billion, as per the EPB data. However, the exports rebounded strongly from September, growing by 14.61 percent to $3.01 billion that month and by 22.80 percent to $3.29 billion in October.
The trend did not stop there as the garment shipments grew by 16.25 percent to $3.30 billion in November before expanding again by 17.45 percent to $3.77 billion in December. Exports started rebounding from September as normalcy gradually returned to the industrial zones after the labour unrest ended with factory owners accepting the 18-point demands of garment workers.
Moderate retail sales growth continued in November even as two of the holiday season’s busiest shopping days bumped over into December and were not included in the month’s totals, according to National Retail Federation (NRF), the largest US retail association.
“November sales increased on top of a strong October and would have been even higher if Thanksgiving Sunday and Cyber Monday hadn’t fallen in December,” NRF President and CEO Matthew Shay said in a statement.
“Year-over-year gains were solid even as retail prices in many categories are lower this year, showing that consumers are buying more merchandise as the economy continues to grow. We remain confident in our holiday forecast,” Shay said.
Total retail sales, excluding automobiles and gasoline, were up 0.15 percent seasonally adjusted month-over-month and up 2.35 percent unadjusted year-over-year in November, according to the Retail Monitor. That compared with increases of 0.74 percent month-over-month and 4.13 percent year-over-year in October. In 2023, the garment export sector aimed for $50 billion in 2024 but adjusted expectations to $38.48 billion, marking a 7.23 percent increase from 2023.
The industry confronted challenges like wage protests leading to a 56 percent wage hike, said Mohiuddin Rubel, a Former Director of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Additional Managing Director of Denim Expert.
Even after uncertainties from the national election, there was a 1.45 percent year-on-year growth in garment exports in January, he said. A 60 percent cut in export incentives, compounded by global economic instability and volatile oil prices, affected consumer behaviour, he said. Rising energy and transportation costs, along with high bank interest rates, hurt small and medium enterprises, causing closures, he added.
Despite a slight increase in exports in July and August compared to the same months of 2023, the figures for 2024 lagged behind those of 2022. Rubel also said the outlook for 2025 depends on improved industrial relations and political reforms.
Former BGMEA President Faruque Hassan said garment exports would have been much higher had the challenges not been there. However, he expects 2025 will be a better year as normalcy is returning to the sector. Exports grew not only in volume, but also value as international retailers’ and brands’ confidence in Bangladesh has been boosted, and the local currency was devalued, he added.
