Apparel exports falling to new lows

• April exports dip sharply by 24% to $ 318 m
• Performance in first four months down 17% to $ 1.5 b

The country’s critical apparel sector is suffering multi-year lows in terms of exports with April performance confirming its ongoing challenge.

April saw exports down sharply by 24% to $ 318 million from a year ago and forced the performance in the first four months to decline Year on year by 17% to $ 1.5 billion. All major markets have witnessed reduction in purchases.

April 2023 exports value was the lowest in recent years (except COVID-hit 2020). The previous lowest was in 2018 April which was $ 323 million. On a cumulative basis, exports in the first four months of 2023 were the lowest (except COVID-2020) and were below $ 1.6 billion range in 2018 and 2021.

The dip in April YoY was sharper than the 11% YoY decline in March. April also marked the fourth month of exports below $ 400 million level. Since September last year, apparel exports have been on a downward trend year on year.

Markets wise, apparel exports to the US in April decreased by 25.5% to $129 million, while the EU (excluding UK) dipped sharply by 27.53% to $ 90 million. Exports to the UK were down by 26.7% to $ 45.8 million and to other countries by 9% to $ 53 million.

In terms of performance in the first four months of 2023, overall exports to the USA decreased by 22.67% to $ 599 million, to the EU (excluding UK) were down by 16.7% to $ 434 million and to the UK by 14.3% to $ 213.6 million. Exports to other countries declined by 4% to $ 254 million.

Apart from higher inventories in markets, industry analysts said Sri Lanka has also become expensive for apparel sourcing given recent cost overruns. “Customers are asking for price reduction as countries such as Bangladesh, Egypt and African countries are far cheaper,” they claimed.

“Sri Lanka is fast losing its competitive edge. Logically we are more expensive and lead times are longer,” said an exporter.

Future orders appear slim as well. Imports of textiles in the first quarter of 2023 are down by 31% to $ 604.6 million. In the first half of last year (January to June) imports grew by 16% to $ 1.68 billion before finishing the year flat at $ 3 billion.