Double whammy hits Bangladesh garment trade as shipments lose steam

Bangladesh's ready-made garment sector is navigating a rough patch, squeezed by falling global demand, an energy crunch and a string of domestic problems.

An average of three to four factories are shutting down every month amid falling orders, energy shortages and, in some cases, labour unrest, costing the sector more than 19,000 jobs over the past six months, said Mahmud Hasan Khan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

New factories continue to open, but not fast enough to pull export earnings back into positive territory.

The sector, the country's largest employer, posted negative growth overall in the last financial year.

Even half a month of halted production during the 2024 July Uprising left export earnings largely unaffected.

The following month, August, saw 7.2 percent growth, and exports stayed in positive territory through May the following year.

Growth ranged between 11.85 percent and 22.80 percent in seven of those 10 months.

Exports then fell 6.31 percent in June 2025, though the year still closed with 8.84 percent overall growth.

Garment exports fell 4.75 percent in August last year, marking the start of an eight-month negative streak that ran through March.

Two months after the national election, exports abruptly jumped 31.21 percent in April, only to fall again by 8.29 percent in May.

With nine of 12 months in negative territory, overall garment export earnings for the just-concluded FY2025-26 fell 1.64 percent from the previous year, to $38.70 billion.

The BGMEA figures show 256 factories shut over the past three years and two months, while 323 new ones opened in the same period.
Factory closures totaled 35 in 2023, 77 in 2024, 141 in 2025, and three more through February this year.

New factory openings totaled 135 in 2023, 106 in 2024, 85 in 2025, and 18 in the first two months of this year. The BGMEA's active factory count stood at 2,127 as of end-February.

Eurostat data indicate European Union countries cut garment imports from the global market by 10.42 percent in the first four months of this year, spending $27.77 billion, down from the same period last year.

Bangladesh's exports to the EU, its largest market, fell 19.33 percent over the same four months, to $6.09 billion, down from $7.54 billion a year earlier.

According to, Export Promotion Bureau (EPB), exports to Europe fell 3.29 percent in the just-ended FY26, to $19.06 billion, reversing the 9.10 percent growth to $19.71 billion recorded the previous year.

Other markets fared better: garment exports rose 2.63 percent to the US, 0.91 percent to the UK and 3.2 percent to Canada last financial year, reaching $7.74 billion, $4.39 billion and $1.34 billion respectively.

Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue (CPD), said exports have broadly slowed for most countries, not just Bangladesh, largely due to the uncertainty stemming from Donald Trump's reciprocal tariff policy.

"Bangladesh's export competitiveness faces stiff competition. Other countries are pulling ahead in exports. Our competitive edge is steadily eroding. That's a warning sign for us," he added.

Rahman also pointed to the rising cost of doing business. "Our cost of doing business isn't falling, it's rising. I believe both global and domestic factors are behind our export slide."

The expert said steps proposed in this year's budget, including opening up bond facilities, faster product clearance against bank guarantees, and raising the limit on raw material storage in bonded warehouses, would offer entrepreneurs some relief if implemented.

The company spent the last four years operating under capacity due to a dearth of export orders and finally put up a closure notice after failing to absorb successive losses.

Finding it impossible to keep operations afloat, Unique Washing and Dyeing and Unique Designers in Gazipur also halted production.

Over a hundred non-BGMEA factories, which employed thousands of workers, have also gone under in the past three years.

This string of factory closures has hit the industrial component of the Gross Domestic Product (GDP).

Provisional data from the Bangladesh Bureau of Statistics (BBS) shows industrial sector growth for FY2026 slowed to 2.86 percent, down from a finalised 3.71 percent growth rate in the preceding year.

BGMEA chief Khan told bdnews24.com that while the shut factories make headlines, many others are currently keeping their doors open despite running at a loss. He pointed out that closing a factory is not something that can be done overnight and raised questions about how long these struggling businesses can survive.�"bdnews24.com