The drop looks less like a one-off and more like evidence that Sri Lanka’s apparel sector is entering 2026 under renewed pressure from weak external demand.
Sri Lanka’s apparel exports fell 11.46% year on year in February 2026 to $361.2m, according to industry reporting and local coverage of the latest figures. The decline was broad-based, with the US down 3.53%, the UK down 5.67%, the EU down 19.48% and other markets down 18.54%.
What the numbers suggest
This was not an isolated bad month after a strong start. January apparel exports had already slipped 2.66% year on year to $425.44m, indicating that demand weakness was present before the February drop deepened.
On a cumulative basis, Sri Lanka’s apparel and textile export earnings for January-February 2026 fell 6.29% to $831.67m. That means the sector remains under pressure even though Sri Lanka’s overall exports performed better: total exports in February rose 4.22% year on year to about $1.4bn, and merchandise exports overall edged up 1.32%.
Why it is important for Sri Lanka
Apparel remains Sri Lanka’s largest export industry, so a decline of this scale matters even when total exports are still growing. The message is that other sectors are currently offsetting apparel weakness, not that the garment sector has stabilised.
What comes next
The likely near-term reading is caution rather than panic. The US appears to be holding up better than Europe and “other markets”, but the overall pattern still points to a difficult trading environment. Recovery in 2026 will depend on whether demand improves in core Western markets and whether Sri Lankan exporters can protect competitiveness through efficiency and market diversification.
