In the first quarter of the current fiscal year, garment exports from Bangladesh dropped 1.64 per cent year-on-year. Earnings from the sector fell 11.52 per cent short of the quarter’s target. While the country’s apparel exports have taken a hit in recent months, competitors have seen a rise in exports. Garment shipments from Vietnam increased by 10.54 per cent in the same quarter. It was 2.2 per cent for India and 4.74 per cent for Pakistan.
The second biggest apparel exporter globally, the Bangladesh garment manufacturing sector is not having the best of times lately. In the last seven months, 59 garment factories have gone out of business while around 25,900 workers have lost their jobs. Most garment factories are small and medium enterprises and they fail to maintain compliance strictly and pay their workers under the new wage structure.
Labor costs are rising across Asia and Bangladesh is no exception. Factories in Bangladesh have grown in a haphazard fashion, some even operating on the upper floors of office or residential buildings. Western apparel makers feel more secure buying from countries like China and Vietnam, where manufacturing is better planned and organized. Price pressure is intense. Western customers are demanding that prices be kept under control.