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Apparel industry sees significant performance contraction in 2023
- Apparel sector earnings dip by 19% YoY
- 2023 full-year earnings total US $ 4.5bn, only slightly higher than performance in 2020
- December export earnings down 8% YoY
- However, an uptick in revenue seen from November 2023, indicating a possible turnaround
- Absolutely vital for offer from Sri Lanka to remain price competitive- JAAF
Sri Lanka’s largest industrial exporter, the apparel sector, saw its performance for the whole of 2023 dip significantly, with its earnings contracting by 19 percent year-on-year (YoY).
The local apparel sector saw its export revenue for 2023 reach US $ 4.5 billion. This is an improvement when compared with US $ 4.15 billion fetched in 2020, the year of the pandemic but a contraction when compared with the performance recorded in 2021 and 2022. In 2021, the apparel sector generated revenues amounting to US $ 5.01 billion, whereas in 2022, the revenue expanded to US $ 5.6 billion.
The provisional data from Sri Lanka Customs shows that exports to all markets saw a contraction in 2023, when compared with 2022.
While the largest contraction is seen in exports to the United States, where exports dipped by 22 percent for the whole of 2023, exports to the European Union, United Kingdom and other markets dropped by 17 percent, 13 percent and 18 percent.
When looking at the apparel sector performance in December, the export revenue dipped by 8 percent YoY to US $ 415 million.
Only exports to the United Kingdom grew by 1.7 percent but exports to the United States, European Union and other markets reduced by 5 percent, 12 percent and 13 percent.
Since September 2022, the apparel export earnings have been on a downward trend, on a YoY basis, primarily due to the economic slowdown in major Western markets.
However, when compared with the performance recorded in November 2023, the apparel sector exports grew by 12 percent month-on-month (MoM). With November 2023 too having recorded a 12.4 percent MoM growth from October 2023, the improvement signals the possibility of the order books slowly but steadily increasing, especially with the seasonal demand.
Speaking to Mirror Business, Joint Apparel Association Forum (JAAF) Secretary General Yohan Lawrence said the industry expects 2024 to remain relatively flat, with some growth later in the year.
“It’s absolutely vital that the offer from Sri Lanka remains price competitive, making positive steps in trade facilitation to avoid losing to competitor countries,” he said.
The competitors such as Bangladesh, for example, saw revenue from apparel expand by around 3 percent in 2023, while Sri Lanka lost 20 percent.
Apparel is Sri Lanka’s largest industrial export and it earned US $ 5.95 billion in 2022. The country’s apparel sector has about 300,000 employees, most of whom are women.
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