Despite facing issues like energy crises, dollar shortages, supply chain disruptions, labor unrest, and political instability, the garment industry in Bangladesh rebounded strongly in H2, FY24, as it was buoyed by the return of western buyers and recovering global markets.
Apparel-makers in Bangladesh faced a multitude of obstacles throughout the year. Labor unrest stemming from demands for wage hikes and inflationary pressures led to massive disruptions in production. Protests by workers, curfews, and government-imposed internet blackouts during the political transition in mid-year further exacerbated the situation. Key industrial belts in Gazipur, Savar, Ashulia, Zirani, and Zirabo witnessed prolonged shutdowns due to vandalism, fires, and strikes.
Resolution came in September when factory owners, labor leaders, and workers reached an agreement on an 18-point demand. One major outcome was an increase in the annual increment for garment workers from 5 per cent to 9 per cent, effective December 2024. While the resolution allowed many factories to resume operations, the sector saw significant setbacks, such as Beximco Group’s decision to lay off over 40,000 workers from 16 units.
Adding to the turbulence, the Central Bank revised export earnings for fiscal 2023-24 down to $36 billion from the initially overstated $47 billion, as per a report by the Export Promotion Bureau (EPB).
Despite domestic challenges, the global market provided a silver lining. As inflationary pressures eased and the world recovered from pandemic and geopolitical crises, Western buyers returned to Bangladesh, leading to a significant rebound in exports.
During the July-November period, apparel shipments to major markets like the EU and the US increased by 16.25 per cent Y-o-Y to $16.11 billion. The future looks brighter now than it did a few months ago, says MA Jabbar, Managing Director, DBL Group, whose clients include Walmart-George, Puma, Esprit, and G-Star.
Echoeing this optimism, Faruque Hassan, Former President, Bangladesh Garment Manufacturers and Exporters Association (BGMEA), highlighted the resurgence of work orders from international retailers as sales rebounded in key markets.
Emphasising on the need for strategic investments to sustain growth, Jabbar called for the establishment of a dedicated EPB-like institution for the garment sector, He urged greater focus on man-made fiber and sportswear, segments experiencing rising global demand. Hassan also stressed the importance of addressing the persistent power and energy crisis to attract investment and create jobs.
Emphasising on the need for political stability and improved law and order, Rizwan Rahman, Former President, Dhaka Chamber of Commerce and Industry (DCCI), said, it underscored the need for political stability and improved law and order to foster a conducive business environment.
Despite a tumultuous year, 2024 was also a testament to the resilience and adaptability of Bangladesh’s apparel industry. With work orders rebounding and political stability returning, the sector stands poised for growth. However, to maintain its competitive edge and capture a larger share of the global market, the industry needs to address systemic issues such as energy shortages, infrastructure challenges, and labor rights.
The year ended with cautious optimism, as industry stakeholders looked forward to 2025 with a renewed sense of purpose and hope for a brighter future.
