Bangladesh’s readymade garment (RMG) exports saw a slight year-on-year decline in July, the first month of the new FY27.
According to the latest data released by the Export Promotion Bureau (EPB), garment exports in July stood at $3.89 billion, representing a 1.92% decrease compared to $3.96 billion recorded in the same month of 2025.
However, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) does not view this slight negative growth as a cause for concern.
According to the association, July of last year was one of the strongest months in the history of Bangladesh’s garment exports.
At that time, exports reached $3.96 billion in a single month, achieving a 24.67% growth rate.
Consequently, compared to that unusually high base, a minor dip this year is normal and expected.
BGMEA stated that achieving nearly $3.9 billion in exports during July—amid ongoing global and domestic challenges—is a testament to the resilience and capability of the country’s RMG sector.
A common concept in economics is the "base effect." If a particular year experiences unusually high growth, maintaining that same level of growth in the following year becomes significantly harder.
BGMEA noted that July 2025 was one of the best months on record for RMG exports.
Assessing this year’s performance purely against that record figure does not reflect the complete picture. Instead, maintaining such a high level of exports amid existing crises is a positive sign for the industry.
Gas crisis remains major production hurdle
Factory owners report that the acute gas shortage is currently the biggest challenge facing the sector.
Due to low gas pressure throughout much of the day in several industrial hubs, factories are unable to run at full capacity.
Because of this shortfall, many factories are forced to adjust production schedules, reduce shifts, or temporarily halt operations altogether.
This raises production costs and makes it difficult to deliver shipments to international buyers on time.
Furthermore, ongoing geopolitical instability in the Middle East and other regions, uncertainties in global supply chains, and fluctuating demand in international markets continue to put pressure on Bangladesh's export performance.
An analysis of EPB data reveals that woven garment exports suffered a sharper decline in July:
- Woven garment exports dropped by 3.16%
- Knitwear garment exports fell by just 0.90%
Industry insiders believe that steady international demand for items such as T-shirts, sweaters, and knit tops helped limit losses in this category.
In line with export values, BGMEA’s Utilization Declaration (UD) data shows a similar pattern.
According to the organization, the number of UDs processed in July 2026 fell by approximately 2.8% compared to the same period last year.
Since UD is a key indicator of export preparation and raw material usage, this decline suggests a lingering slowdown in overall export activities.
BGMEA emphasizes that relying solely on market recovery will not resolve the current situation.
To sustain long-term competitiveness, securing energy supplies, controlling production costs, improving port and logistics infrastructure, and providing timely policy support are crucial.
The association believes that if gas and electricity supplies normalize and required policy backing continues, exports could return to positive growth in the coming months.
Analysts note that Bangladesh's RMG industry faces not only domestic energy challenges but also intense global competition.
Competitor nations such as Vietnam, India, Cambodia, and Indonesia are strengthening their global market standing by boosting production capacity and streamlining supply chains.
At the same time, international brands are no longer prioritizing low prices alone; speed of delivery, eco-friendly manufacturing, sustainable factories, and uninterrupted production capabilities carry equal weight.
Therefore, resolving the energy crisis quickly is no longer just a production concern—it is a prerequisite for staying competitive on the global stage.
