A stimulus package from the government can help the SMEs survive and sustain their business. And if the SMEs survive, the apparel industry of Bangladesh will surely thrive in the coming years
Bangladesh’s apparel industry has been going through challenging times after the Covid-19 pandemic. The country’s apparel export to the USA, its single largest export destination as a country, declined by 21.77 percent from January to August of the FY 2023-24.
Bangladesh is the third-largest apparel exporting country to the US after China and Vietnam. All the top apparel import sources of the US, including China, Vietnam, India, and Indonesia have also shown significant negative growth in the January-August 2023 period.
According to Otexa data, the overall apparel import of the US from the world has declined by 22.77 percent in this period of the year, compared to the same period in 2022.
There is no good news from the European Union front as well, which as a region is our largest apparel export destination. Bangladesh’s apparel export to the EU declined by 12.69 percent in the first half of 2023, totaling Euro 9.06 billion compared to Euro 10.37 billion in the same period of 2022. This decline can be attributed also to a reduction in clothing demand due to high inflation and silent recession affecting the EU’s 27 countries.
Though Bangladesh’s apparel export to the EU in the September period of fiscal 2023-24 registered an 11.47 percent growth compared to the same period of the previous fiscal year, according to the Export Promotion Bureau (EPB), we cannot count on it to be a promising sign.
There is little hope that the situation will change in the near future, because of the world’s current economic instability. In this situation, the small and medium-sized apparel factories of Bangladesh have been facing the most difficulty sailing through this hard time. These SMEs are the foundation upon which the citadel of Bangladesh’s industry was built. So, it’s of utmost importance that we provide these small and medium-sized garment factories with support right at this moment.
But if planners fail to support these SMEs to exist in this tumultuous time, Bangladesh’s vision of achieving the $100 billion apparel export by 2030 will be a pipe dream. The time is tough for all factories, irrespective of whether they are big, medium-sized, or small. But big players sometimes can face the storm, which destroys the medium and blows away the smaller factories; as apparel is a capital-intensive business.
The government stimulus package during the pandemic helped the factories to stand and stay in business. The present situation is no less grievous than the pandemic. If the SMEs survive, the apparel industry of Bangladesh will surely thrive in the coming years.
