The year 2019 started with a very positive note as the garment manufacturing sector registered a handsome export growth in January. In the month of January, the earning was a bit high because of the US-China trade war. But, unfortunately, the inflow of work orders due to the tariff war did not continue all the year-round.
As a result, the year 2019 ended with a poor performance although the year began with a strong positive note. In 2019, Bangladesh fetched $33.08billion worth of garment items. In January the shipment of garment was robust at $3.13billion. The production was quite friendly at the factory level as no unrest was reported.
However, the garment export started declining just from the second month of 2019 in February. In February Bangladesh earned $2.90billion from the shipment of apparel items. This losing streak also continued in March as well. The March export lowered to $2.83billion.
April earning was one of the lowest in 2019. Bangladesh earned $2.54billion from garment shipment in April because of the low inflow of work orders from the buyers.
In May the earning from the garment shipment registered a little bit high because of higher sales of summer apparel items to the western world.
In May Bangladesh exported garment items worth $3.24billion, according to data from the Export Promotion Bureau (EPB) and Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
In June export dipped again because of the lean season for production and for fasting month of Ramadan and Eid vacation. The shipment of apparel items was slow during this time. The June receipt from the garment shipment was $2.40billion.
However, the July earning from apparel shipment was remarkable last year. The export rose significantly in July due to higher production after the vacation. The July earning was $3.31billion last year.
Again, the apparel shipment started declining in August last year because of the long holiday of the factory management and workers on the occasion of the Eid ul Azha.
In August, Bangladesh exported garment items worth $2.41 billion. The August receipt was one of the lowest last year. The September receipt was even lower. Many factories were suffering from a lack of work orders. In September Bangladesh exported apparel items worth $2.34billion.
In October, the sector could rebound its glory because of less work orders, less production for shut down of some units as they failed to maintain the standard compliance and safety. In October the receipt from the apparel shipment was $2.52billion.
November earning was almost the same as October because of the slowdown in the inflow of work orders from the international retailers and brands. In November, the earning was $2.51billion.
In December, the garment shipment rebounded to some extent because of high shipment on the eve of Christmas sales in the western world. In December, the earning from apparel shipment was $2.94billion.
It was a happening year for the readymade garment industry as 2019 marked a number of positive developments, yet it was not a pleasant time for our export as growth had been faltering throughout the year and had a nosedive in the latter half, said Rubana Huq, President, BGMEA.
The end to the stalemate situation of Accord’s phase-out from Bangladesh and the formation of national safety monitoring regime the ‘RMG Sustainability Council (RSC)’ were major breakthrough initiatives, Huq said.
“Our journey to sustainability continued with pride, the number of green factories crossed 100 with 25 platinum LEED-certified factories and 500 more registered for the certification,” she also said.
Implementation of the new minimum wage was the major challenge for us, though complied, the industry continues to face severe financial hardship which resulted in the closure of 61 factories and export kept plummeting for the fourth consecutive month starting from August 2019, Huq said.
The stronger value of Bangladeshi Taka against the US dollar compared to competitor currencies has added to the woes as the industry keeps struggling with unit price. Despite all the investments made in workplace safety, compliance, implementation of new wage structure and green industrialization the unit price did not see much improvement.
Unit price in the EU and the USA has increased by 2.22% and 5.57% respectively during Jan-Oct 2019 (year over year), yet the price level remains significantly lower on a five-year comparison.
The price of apparel imported by the USA from Bangladesh during Jan-Oct 2019 compared to Jan-Oct 2014 was down by 2.20% (source: OTEXA), and the same happened for EU by 1.94% (source: Eurostat), the BGMEA president added.