Bangladesh's garment shipments to Italy and Japan increased from July to October. Apparel exports to Italy -- the sixth largest garment export destination for Bangladesh – were up 6.43 per cent year-on-year. Similarly, garment shipments to Japan increased seven per cent year-on-year during the period. Japan is the largest importer of Bangladeshi garments in Asia.
In fiscal 2015-16, garment exports to Italy, where duty-waiver is applied under the European Union's ‘Everything but Arms’ scheme, grew 3.22 per cent year-on-year. Garment exports to Japan were up 18.68 per cent from a year earlier. Bangladesh’s resilience boils down to a combination of the world’s lowest wages after Myanmar and Sri Lanka, the right skills and the fact that China has become less competitive in recent years.
Even though Bangladesh's clothing exports are booming, the already slim profit margins of manufacturers being eroded further as pressure for cost savings and improved safety intensifies. Garment exporters are worrying about profit margins being squeezed due to increased compliance costs. Most of Bangladesh’s garment exporters are operating with a profit margin of just three per cent. Firms have to spend on upgrading facilities to meet safety compliance standards. Adding to the strain, garment exporters are under pressure to further reduce prices to retain customers.