The Joint Apparel Association (JAAF) expects Sri Lanka’s apparel exports to reach $4.5 billion in 2024, with a potential uptick in the second half. The association emphasises the importance of maintaining cost competitiveness, improving ease of doing business, and achieving macro-economic stability for sustained growth.
While Sri Lanka's apparel exports faced challenges in 2023, ending the year with a 19 per cent decline compared to 2022's record high, there were promising signs of rebound in December. The final month saw the highest export figure since December 2022, reaching $415.6 million.
The industry's slowdown was attributed to global factors like inflation and recessionary fears impacting consumer spending and leading to high inventory in major markets. However, December's strong performance suggests a potential turnaround.
Despite the overall decline, there were some bright spots in terms of export destinations. While exports to the US and EU (excluding UK) saw significant decreases, the UK and ‘other countries’ categories showed marginal improvements in December. Notably, exports to the UK rose for the second consecutive month, increasing by 20 per cent in November and 1.7 per cent in December.
The decline in imports of textiles and textile articles further suggests a shift towards domestic production and potentially increased competitiveness for Sri Lankan apparel exports.
Overall, while 2023 presented challenges, the final months of the year and early indications for 2024 suggest a potential recovery for Sri Lanka's apparel industry. Continued efforts to improve cost competitiveness, ease of doing business, and macro-economic stability will be crucial for long-term success.
