Bangladesh Booked Loss as US Apparel Brands and Retailers Diversified Sourcing
Of the top ten largest apparel suppliers to the US, only two booked a loss, and that was Bangladesh – the third largest apparel supplier to the US – of 2.2% to 217m SME, and Mexico, whose shipment volumes fell 5.4% to 51m SME.
When analyzing the decline in Bangladesh’s shipment volumes, the figure is unsurprising given the unrest the sourcing major is experiencing.
Local news reports suggest the protests have come at a challenging time for the interim government, which has struggled to maintain stability following the resignation and departure of former prime minister Sheikh Hasina on 5 August, amid student-led anti-government protests. The transitional administration faces increasing pressure to address workers’ demands while ensuring law and order.
Earlier, UNI Global Union and IndustriALL called on 200 fashion brands to maintain their engagement in Bangladesh and commit to garment orders to help secure the country’s democratic and economic future.
Dr Sheng Lu, professor of apparel studies at the University of Delaware observes: “Imports from Bangladesh decreased by 2.2% in quantity and 6.7% in value year over year. This decline serves as another warning sign of the negative impact that recent unrest and instability in Bangladesh have had on the country’s competitiveness as a sourcing destination. Additionally, because Bangladesh is primarily used as a sourcing base for relatively basic apparel items, it is relatively easy to find alternatives in other nearby Asian countries.”
The figures stand up his point with all of the Asian apparel sourcing majors seeing healthy shipment increases during July.
Cambodia saw one of the most significant increases of the ten at 19.4% to 112m SME, while Indonesia booked an increase of 3.6% to 85m SME. India saw a 2.5% increase in shipment volume to 115m SMEs, while Pakistan saw a 2.4% increase to 63m SMEs.
Meanwhile, when it comes to Central American sourcing majors, Honduras booked the biggest increase in shipment volumes – in fact of all the ten major apparel supplier nations to the US of 20.3% to 73m SME.
Nicaragua booked a 4% increase in shipment volumes during July to 54m SME.
Lu observes: “US apparel imports experienced unexpected substantial growth in July 2024. However, whether and how long the growth will last remains a question mark. Specifically, US apparel imports in July 2024 increased by 2.4% in volume and 7.0% in value from a year ago. After adjusting for seasonal factors, imports in July 2024 rose by over 9% from June, both in quantity and value. Interestingly, US apparel retail sales in July 2024 were nearly flat compared to June. Likewise, the US consumer confidence index slightly declined over the same period. Although other factors may also come into play, the apparent surge in apparel imports was likely driven by fashion companies’ eagerness to get their products earlier before potential tariff increases.”
