Garment exports to rebound in May as global economy on the mend

Garment export from Bangladesh may witness a strong rebound from May as suppliers are receiving a lot of inquiries from international buyers as the global economy recovers from the severe fallout of the Covid-19 pandemic and the Russia-Ukraine war.

Signs of revival in garment shipments are already being seen in the export data of the current fiscal year.

In the July-January period of 2023-24, garment export grew 3.45 percent year-on-year to $28.36 billion, according to data from the Export Promotion Bureau (EPB).

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Matthew Shay, president and CEO of the National Retail Federation (NRF), the largest retail trade association in the US, said in a statement last week that retailers were coming off a successful holiday season.

Sales growth is expected to be 3 percent to 4 percent, reflecting a more sustainable rate of growth than seen during the pandemic-hit years, he said.

He added that the growth reflected the fact that retailers were accommodating the expectations of consumers and demonstrated the underlying strength of the US economy.

"Inquiries from international retailers and brands, especially from Europe and the US, are increasing. This indicates that export may revive to some extent, if not significantly," said Md Fazlul Hoque, managing director of Narayanganj-based Plummy Fashions Ltd.

"I am hopeful that exports will revive from May, but it may not be that significant."

Anwar-ul Alam Chowdhury, a former president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), says inquiries from retailers and brands were low in September and October last year.

"As they are now increasing, it is expected that work orders will pick up around April or May and export will reach the previous levels as the economies of major export destinations like Europe and the US are rebounding from the global economic slowdown and historic inflationary pressures."

A major European buyer, asking not to be named, said although his company would not increase work orders significantly, there was no chance of reducing orders.

Shafiur Rahman, regional operations manager of G-Star, a Dutch designer clothing company, thinks the revival may start from June as per projections by international retailers and brands.

"2025 will be a good year for the garment business as the world economy is rebounding."

According to exporters, the shipment of garment items would increase in the coming months because inflation has fallen in the West and people are spending.

Moreover, buyers are sending a lot of inquiries to buy goods from Bangladesh, said BGMEA President Faruque Hassan.

Old inventories at stores have been reduced on the back of higher sales during the festival season in November and December like Christmas.

"Since the stock of clothing items has reduced, retailers and brands are placing a lot of work orders," Hassan added.

He said local manufacturers and suppliers have diversified in terms of both markets and products over the years and are now reaping the rewards of such initiatives.

"In many cases, local suppliers are getting premium prices from buyers as they produce high valued-added items."

Garment suppliers have also made improvements in terms of compliance, which, coupled with green initiatives, has brightened the image of the sector and the country.

"This increases buyers' confidence when sourcing garment items from Bangladesh," the BGMEA chief added.