By: Staff Writer
October 29, Colombo (LNW): Sri Lanka’s apparel industry has recorded a welcome recovery in September, but the latest export figures reveal that the country’s most important manufacturing and foreign-exchange-generating sectors remains under pressure, with a cumulative shortfall of approximately US$210 million threatening to undermine confidence in a sustained recovery.
Apparel exports reached US$416.99 million in September 2026, representing a 3.47% increase from US$403.01 million recorded in September last year. The improvement was primarily driven by stronger shipments to the United States and the European Union, Sri Lanka’s two largest apparel markets. However, the monthly rebound must be viewed against the more concerning performance during the first nine months of the year.
Exports between January and September amounted to US$3,588.46 million, down 5.52% from US$3,798.25 million during the corresponding period in 2025. The difference of approximately US$209.79 million highlights the scale of the challenge facing manufacturers, exporters and policymakers.
The United States delivered the strongest major-market performance in September, with exports rising 7.17% to US$172.03 million. Shipments to the European Union, excluding the United Kingdom, increased 6.5% to US$132.46 million. These gains suggest that Sri Lankan manufacturers retain the capacity to compete when demand and purchasing opportunities improve.
Nevertheless, the recovery remains uneven. Exports to the United Kingdom declined 5.92% to US$47.33 million, while shipments to other destinations fell 3.89% to US$65.17 million. The continuing weakness in these markets raises questions about the industry’s ability to compensate for declining demand through geographical diversification.
The cumulative figures are even more troubling. During the first nine months, exports to the UK fell 10.85%, the steepest decline among the major destinations. Shipments to the EU contracted 5.44%, while other markets recorded a 5.43% reduction. Exports to the US, despite September’s improvement, remained 3.69% below the previous year’s level.
International competition is adding to these pressures. US import data indicate that Chinese apparel shipments to the American market declined by approximately 34% during the first seven months of 2026. Industry representatives say China and India have increasingly redirected attention towards Europe following higher US tariffs, intensifying competition in a market important to Sri Lankan exporters.
China’s share of EU apparel imports increased from 26.9% to 28.6% between January and April 2026, illustrating the competitive challenge facing manufacturers seeking to expand European sales.
Joint Apparel Association Forum Secretary General Yohan Lawrence has described September’s growth in the US and EU as encouraging, while warning that exports remain more than 5% below last year’s performance. He stressed the need for competitively priced, reliable energy and a supportive policy environment.
The policy implications extend beyond individual factories. Apparel exports generate foreign exchange, support employment and sustain supply chains involving transport, logistics and local suppliers. Prolonged weakness could therefore affect household incomes, investment decisions and the country’s external-sector recovery.
The immediate priority is to convert September’s improvement into sustained growth. That requires more than favourable market movements: predictable energy costs, efficient trade procedures, productivity improvements and access to new buyers will be essential.
September offers evidence that recovery is possible. It does not, however, erase the US$210 million deficit accumulated over nine months. Until successive months deliver stronger results, declaring a turnaround would be premature.
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