Apparel sector recovers amidst highest ever performance in December
By: Staff Writer
January 23, Colombo (LNW): The apparel sector in Sri Lanka is recovering following the decline in exports confronted with substantial obstacles, including multi-year lows in exports and an ongoing downward trajectory.
In April, exports plummeted by 24% to $318 million, exacerbating the year-on-year decline of 17% to $1.5 billion in the first four months of 2023. This decline affected all major markets.
Apparel exports now appear to be showing signs of rebound with December marking the highest ever performance in a year though the industry ended 2023 with negative growth.
Exports in December amounted to $ 415.6 million as per provisional data from the Joint Apparel Association (JAAF). The December 2023 figure is the highest since December 2022’s tally of $ 451 million.
In 2022, apparel exports averaged over $ 500 million between June and August, before slump began due to global factors such as reduced spending capacity associated with high inflation and recessionary concerns as well as high inventory in most of the major markets
Total exports in 2023 amounted to $ 4.5 billion, down 19% from the industry’s best year in 2022 when exports soared to $ 5.6 billion.
Several factors contribute to this challenging situation, including heightened market inventories and escalating costs in Sri Lanka.
Industry experts note that Sri Lanka’s apparel sourcing has become comparatively expensive, leading customers to seek lower-cost alternatives in countries like Bangladesh, Egypt, and African nations. The country’s loss of competitiveness is evident through higher prices and longer lead times, dissuading potential buyers.
“We would expect 2024 exports also to be $ 4.5 billion with the second half seeing some uptick,” a spokesman for JAAF said. “Cost competitiveness and ease of doing business are key along with macro-economic stability,” he added.
While overall exports to the USA decreased by 22.32% to $ 1.8 billion, exports to the EU (excluding exports to UK) were down 17.4% to $ 1.4 billion. Exports to the UK in 2023 dipped by 12.6% to $ 627 million and to other countries by 17.7% to $ 707 million.
In December exports to the USA were down by 4.97% to $ 175 million, to the EU (excluding UK) by 13% to $ 121 million. Exports to the UK market saw a welcome but marginal increase of 1.7% $ 54.4 million whilst to other markets exports were down by 13% to $ 65 million. In November too exports to the UK improved by 20% year on year to $ 48 million.
In the first 11 months of last year, imports of textiles and textile articles declined by 23.6% to $ 2.2 billion.
