Crippled by severe, multi-year natural gas and electricity shortages, surging production costs, overwhelming debt burdens, and shrinking export orders, prominent entrepreneurs are opting to shutter facilities, lay off thousands of workers, or consolidate operations simply to stay solvent.
According to a comprehensive review by the Centre for Policy Dialogue (CPD), 95 factories permanently closed across three primary industrial belts—Gazipur, Savar-Ashulia, and Narayanganj-Narsingdi—between August 2024 and February 2025 alone, directly eliminating 61,881 jobs and destabilizing local economies.
A total of 959 major trade association-affiliated factories (BGMEA: 499, BKMEA: 235, BTMA: 166, BEPZA: 59) closed between August 2024 and June 2026, alongside over 1,000 non-apparel SME units.
Unprecedented technical failures at the Maheshkhali LNG terminal and international cargo procurement bottlenecks caused industrial gas usage to fall from 1,186 million cu. ft. to 1,148 million cu. ft., sending power generation growth into negative territory (-0.1%).
BTMA president Showkat Aziz Russel permanently closed a particle board mill and five spinning mills, citing total lack of confidence in gas grid restoration over the next two years.
Private sector credit growth dropped from 6.0% to 4.5%, Net Foreign Direct Investment (FDI) plummeted from $662 million to $594 million, and capital machinery import LCs plunged into negative territory at -13.6%.
Bangladesh Bureau of Statistics (BBS) data registered a -0.28% contraction in industrial growth for Q1 2026, while overall manufacturing growth hit an absolute standstill (0%).
Macroeconomic Stress & Contraction Flow
Infrastructure & Utility Bottlenecks (LNG Outages / Low Gas Pressure)
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Escalating Overhead Costs (4x Alternate Fuel Costs + Bank Debt Servicing)
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Capacity Utilization Crashes to <50% ──► Widespread Factory Closures
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Severe Spillover Effects: -13.6% Capital LC Imports | 61,881+ Jobs Lost | -0.28% Growth
Metric / Indicator | Historical / Baseline | Current Status (2026) | Economic Impact |
Industrial Gas Usage | 1,186 Million cu. ft. | 1,148 Million cu. ft. | Severe drop in boiler and turbine pressure across textile, steel, and ceramics |
Manufacturing Sector Growth | 3.5% | 0.0% (Standstill) | Total stagnation in local production and export processing capacity |
Capital Machinery LC Growth | +14.6% | -13.6% | Sharp drop in plant expansion and modern capital investment |
Private Sector Credit Growth | 6.0% | 4.5% | Severe liquidity crunch and restricted commercial borrowing |
Net Foreign Direct Investment | $662m | $594m | Waning foreign investor confidence in domestic energy infrastructure |
Chronological breakdown of factory closures across associations
- Primary Export Apparel Closures (BGMEA)
Aug 2024 – Jun 2026
499 member units closed. Severe order cancellations, dollar illiquidity, and escalating utility tariffs forced export garment units out of operation.
- Knitwear & Small Apparels Collapse (BKMEA)
Aug 2024 – Jun 2026
235 member units closed. Knitwear dyeing and finishing units suffered from missing gas pressure, leaving them unable to meet tight shipment deadlines.
- Primary Textile & Spinning Shutdowns (BTMA)
Aug 2024 – Jun 2026
166 member units closed. Primary yarn and fabric mills faced massive operational losses due to partial capacity utilization and unmanageable bank liabilities.
- Export Processing Zone Retrenchment (BEPZA)
Aug 2024 – Jun 2026
59 specialized foreign & joint-venture units closed. Utility supply unpredictability forced export-oriented enterprises to exit specialized zones.
Shift from expansion to liquidation
"There is no realistic chance of gas and electricity stabilizing within the next two years," warned Showkat Aziz Russel, president of BTMA.
"Carrying massive fixed costs, paying idle salaries, and servicing bank debts without continuous production is impossible. We are now liquidating non-core assets simply to settle bank liabilities rather than investing in expansion."
"The actual number of displaced workers is far higher than the recorded figures," highlighted Prof Mustafizur Rahman, distinguished fellow at CPD.
"When factories close temporarily or run at under half capacity, workers remain on paper but lose reliable income. Once a factory completely shuts down, restarting it is exponentially harder than building a new one—machinery rusts, supply networks shatter, and skilled labor disappears."
To prevent permanent industrial collapse and protect national employment, industry leadership and economists recommend an immediate, structured policy intervention:
- The Ministry of Power, Energy and Mineral Resources must provide a binding, zone-by-zone schedule detailing gas pressure availability and short-term infrastructure restoration.
- Bangladesh Bank must institute a customized debt-rescheduling and working-capital support framework for distressed but viable manufacturing units.
- Rapidly transition reliance away from volatile spot-market LNG imports toward aggressive onshore and offshore domestic gas exploration.
