Apparel exports drop by 22% to $ 3.1 b in 9 months

• Lowest cumulative exports recorded from Jan. to Sept. in past 5 years
• Overall exports in 9 months to US fell by 22.15%, EU fell by 21.36%; lowest compared to same period in the past 5 years
• September total exports of apparel and textile fell by 4.89% to $ 406.13 m

By Charumini de Silva

The apparel industry has fallen victim to the COVID-19 pandemic with the total exports in the first nine months down by 21.97% to $ 3.1 billion compared to the same period last year.

It is the lowest cumulative apparel and textile export recorded during the nine months period from January to September in the past five years, as highest recorded was $ 3.9 billion in 2019.

According to Joint Apparel Associations Forum (JAAF) sources, overall exports to the US fell by 22.15% to $ 1.4 billion and exports to the EU fell by 21.36% to $ 1.3 billion during the first nine months of the year, while overall exports to other countries also fell by 23.25% to $ 424 million over the same period.

In September, total exports of apparel fell by 4.89% to $ 406.13 million compared to the same period a year earlier. 

Although exports to the US dropped by 10.60% to $ 172 million, exports to the EU has recorded a marginal increase of 1.33% to $ 181.38 million in September. Exports to other countries also fell by 5.16% to $ 53.11 million in September. The JAAF data also shows that the total apparel exports to the US and EU during the nine months period of this year recorded its lowest compared to the same period in the past five years. 

First nine months overall exports to the US in the past five years were: in 2015, it was $ 1.5 billion; in 2016, it was $ 1.6 billion; in 2017, it was $ 1.5 billion; in 2018, it was $ 1.6 billion; and in 2019 it was $ 1.7 billion. Exports to the EU in the same period were: in 2015, it was $ 1.4 billion; in 2016, it was $ 1.5 billion; in 2017, it was $ 1.5 billion; in 2018, it was $ 1.5 billion; and in 2019, it was $ 1.6 billion.

With the recent spike in COVID-19 infected persons within the country, industry said its priority now is to contain the spread of the virus and pointed out that it was too early to assess the situation or to predict how the year-end performance will be. 

“We are concerned about the impact, but our hope is that the situation will be controlled soon,” JAAF sources told the Daily FT.

Previously, JAAF was of the view that apparel exports for the entirety of 2020 are likely to be $ 2 billion lower than last year, despite picking up in recent months. Revised forecast is that apparel export earnings to decline by 40%, which is about $ 2 billion, and in the best case scenario, earnings to drop by $ 1.3 billion to $ 3.3 billion by the year end.

Sri Lanka last year earned $ 5.3 billion from apparel exports, an increase of 5.1% from 2018. Prior to the COVID-19 pandemic, the industry originally expected a 6% increase in exports for 2020.

The apparel and textile industry is the second largest contributor to the national gross domestic product (GDP) and largest overall employer. Around 300 garment factories employ 990,000 and over one million people are indirectly dependent or employed.

Entirely privately owned and operated, the apparel and textile manufacturers have successfully utilised the opportunities in the international market to evolve beyond traditional exports and tailoring designs to provide sophisticated and creative solutions through fashion BPO services, research, development and innovation centres. 

Unfortunately, it has now been impacted severely as a result of the pandemic.