After two months of contraction, Sri Lanka’s earnings from the apparel sector increased by 4 per cent Y-o-Y in June 2024, shows data released by the Joint Apparel Association Forum (JAAF).
As per this data, Sri Lanka’s export earnings from the sector rose to $ 417 million Y-o-Y in June 2024 from $401 million in corresponding month of the previous year. This growth can be attributed to a rise in exports to the United States, which rose by 12.78 per cent Y-o-Y to $174 million. In contrast, Sri Lanka’s exports to the European Union and the United Kingdom declined by 12.65 percent Y-o-Y and 3.52 percent Y-o-Y to $ 116 million and $55.91 million respectively. Exports to other markets grew by 27 percent Y-o-Y to $ 71 million.
Despite the positive signs in June, the overall performance of the Sri Lanka’s apparel sector declined during the first half of the year. Earnings from the sector declined by 1.18 per cent Y-o-Y to $ 2.2 billion and by 19 percent compared to the first half of 2022. From Jan-June 2024 period, exports to the US and EU fell by 2.87 percent and 4.42 percent Y-o-Y, to $857 million and $659 million, respectively. However, exports to the UK and other markets increased by 7 percent and 1.84 percent Y-o-Y.
As per a recent analysis by Capital Alliance (CAL), having struggled due to global economic challenges, Sri Lanka’s textile and apparel sector ison a slow recovery mode. According to CAL, three key factors contributing to the sector's improvement include.
As per US data from the first quarter of 2024, apparel inventory levels are at their lowest since 2022, suggesting a need for increased orders to replenish retail stocks. Second, there has been an uptick in US retail sales for clothing, accompanied by an increase in apparel imports, reflecting a rise in demand. Third, cotton prices have dropped by nearly 27 percent since their peak in February 2024. This decrease is attributed to strong supply from countries like Brazil and the US.
These factors are collectively contributing to a promising outlook for the apparel and textile industry in Sri Lanka, adds CAL.
