After a challenging year, Cambodia's garment, footwear, and travel goods (GFT) exports surged by 21.64 per cent to $967 million in January. This positive turnaround brings cheer to an industry that employs nearly a million Cambodians and contributes significantly to the nation's economy.

All sectors within GFT saw impressive growth, led by knitted apparel and clothing accessories exports that grew by 24.3 per cent and non-knitted apparel exports that surged by 30.9 per cent, Exports of footwear and travel goods also grew highlighting a broad-based recovery.

This achievement comes despite ongoing trade challenges like the loss of GSP benefits from the US and reduced EBA benefits from the EU. This demonstrates the resilience of the Cambodian industry and its ability to adapt.

The GFT sector is a vital source of employment and economic growth for Cambodia. The recent export surge offers hope for stemming job losses and factory closures that were seen in the past year. The government's support through initiatives like the $40 monthly allowance for affected workers is also commendable.

However, Cambodia faces stiff competition from regional players like Bangladesh. To remain competitive, continuous skill development for workers and cost-effective measures like promoting renewable energy are crucial.

With suppliers receiving a lot of inquiries from international buyers, garment exports from Bangladesh are likely to witness a strong rebound from May this year 

As per data from the Export Promotion Bureau, garment exports from Bangladesh grew by 3.45 per cent Y-o-Y to $28.36 billion during the July-January period of 2023-24.

Retailers are coming off a successful holiday season, says Matthew Shay, President and CEO, National Retail Federation (NRF), the largest retail trade association in the US. Sales are expected to grow by 3 per cent to 4 per cent, reflecting a more sustainable rate of growth than seen during the pandemic-hit years, he adds. 

Exports may revive to certain extent in May as inquiries from international retailers and brands are increasing, says Md Fazlul Hoque, Managing Director, Plummy Fashions.  However, this growth may not be significant, he adds. 

Anwar-ul Alam Chowdhury, Former President, BGMEA, notes, the rise in inquiries from retailers and brands may lead to a surge in work orders around April or May leading to a an increase in exports to the previous levels.

Shafiur Rahman, Regional Operations Manager, G-Star, opines, revival may start from June as per projections by international retailers and brands.

According to exporters, garment exports could increase in the coming months due to fall in inflation in the West leading to an increased spending by buyers. 

Moreover, buyers are sending a lot of inquiries to buy goods from Bangladesh, affirms Hassan. Since the stock of clothing items has reduced, retailers and brands are placing a lot of work orders, he adds.

Buyers’ confidence in the industry has also increased due to various improvements made by suppliers in terms of compliance and green initiatives, Hassan adds. 

The All Pakistan Textile Mills Association (APTMA) has issued a strict warning to the government, stating that over half of the country's textile and apparel firms face imminent closure unless immediate action is taken. 

 APTMA blamed high energy costs, averaging twice those of competitors, for eroding Pakistan's international competitiveness. Electricity prices in the country stand at 16.7 cents/kWh, while gas prices are set to increase further. The association expressed concerns over the high inflation, weak external sector performance, and stagnant foreign exchange earnings that are creating an unsustainable economic environment impacting employment, poverty, and government finances.

Further, APTMA argued, declining industrial power consumption has increased power tariffs for all, creating a vicious cycle of declining demand and rising costs. 

The association sought a meeting with the finance minister to discuss the industry's critical situation and its potential consequences for the entire economy...It further urged the government to implement urgent corrective measures to address the energy crisis and improve the overall economic environment.

In 2023, US’ total apparel imports plummeted by 22 per cent to reach $77.8 billion. However, European producers bucked the trend, with imports from the EU growing by 2.4 per cent to $3 billion. 

US’ imports from Italy and France surged by 3.5 per cent and 10.8 per cent respectively as demand for luxury goods increased. However, imports from the UK remained stable.

While US apparel imports from all other regions declined, the EU held steady compared to 2022. This positive trend for European exports can be attributed to several factors. Western and US brands overestimated the post-pandemic recovery, leading to excessive inventory buildup in 2022. This resulted in reduced demand for new orders in 2023, a trend mirrored in EU sourcing.

Despite the global slowdown, European producers maintained their US market share due to several factors, including a strong brand reputation, proximity and agility and product differentiation. 

Overall, the 2023 US apparel import data presents a mixed picture. While the global market witnessed a significant decline, European producers emerged as winners, highlighting the importance of brand image, agility, and product differentiation in the competitive landscape.