The readymade garment (RMG) industry, the primary engine of Bangladesh’s economy, is navigating a turbulent patch in the current FY26.
The industry is posting some of its weakest growth metrics in recent years, sparked by a noticeable contraction in purchase orders from its core traditional strongholds: Europe and the United States.
According to the latest data released by the Export Promotion Bureau (EPB), Bangladesh shipped RMG exports worth $35.31 billion during the first eleven months (July to May) of the current fiscal.
This represents a 3.41% decline in export revenues compared to the same period in the previous fiscal.
Industry insiders attribute this contraction to a combination of persistent global inflation, squeezed consumer spending power in Western economies, inventory optimization by major international retailers, and aggressive price-cutting pressures from buyers.
The European Union remains the single largest destination for Bangladeshi apparel, absorbing roughly half of the country's total RMG output.
However, inflationary pressures and high living costs across the eurozone have heavily restricted discretionary consumer spending.
- 11-Month EU Export Volume: $17.36 billion
- Share of Total RMG Exports: 49.15%
- Year-on-Year Growth: ▼ 4.88%
Faced with sluggish retail sales, major European brands and high-street retailers are adopting highly conservative inventory strategies.
Exporters report that buyers are scaling down order volumes per style while simultaneously demanding lower unit prices.
This pricing squeeze is squeezing profit margins for local manufacturers, who are already grappling with rising domestic utility tariffs and overhead costs.
The United States holds its position as Bangladesh's second-largest single-country export market, purchasing roughly one-fifth of its total outbound apparel shipments.
During the July–May window, RMG exports to the US stood at $7.03 billion.
While the nominal year-on-year drop appears microscopic at 0.04%, trade analysts view this flatline as a significant warning signal.
American retail giants are focusing heavily on supply chain lean management, keeping inventory low, and holding off on large-scale forward commitments until domestic consumer confidence stabilizes.
Global slowdown hits non-traditional markets
Bangladesh's long-term strategy to hedge its market risks by diversifying into non-traditional destinations—including Japan, Australia, India, Russia, South Korea, Brazil, Mexico, and the Middle East—is also feeling the macroeconomic chill.
During the reviewed 11-month period, garment shipments to non-traditional markets totaled $5.68 billion, accounting for 16.09% of total garment exports.
However, revenue from these alternative destinations slipped by 5.95%.
This synchronized drop indicates that the current consumer demand crunch is no longer restricted to Western economies but has evolved into a broader global retail slowdown.
The downturn has hit both primary manufacturing segments of the apparel industry, confirming that the slump is systemic rather than product-specific:
- Knitwear Exports: Contracted by 4.26%, reflecting reduced global demand for casual apparel like T-shirts, polo shirts, and sweaters.
- Woven Apparel Exports: Decreased by 2.42%, pointing to slower retail movement for structured garments such as formal shirts, trousers, and heavy outerwear jackets.
Among the major export destinations, Canada emerged as the lone outlier, posting a modest positive growth of 2.27% to reach $1.23 billion.
Meanwhile, shipments to the United Kingdom dipped slightly by 0.50% to clear $4.02 billion.
Mohiuddin Rubel, former director of the BGMEA and additional managing director of Denim Expert Limited, noted that the export data from the first eleven months confirms that global apparel demand has yet to mount a full recovery.
He explained that consumers in core markets like the EU and the US are still cutting back on non-essential purchases, directly impacting order inflows. Buyers are looking for lower price points and managing risk carefully, which places immense pressure on both export volumes and factory margins.
