The apparel exports from Sri Lanka have continued to decline, with October exports showing a 20 percent year-on-year decrease to US $330.95 million, according to data compiled by the Joint Apparel Association Forum (JAAF). This downward trend in apparel export earnings has been observed since September 2022, primarily due to the economic slowdown in major Western markets.
The JAAF data reveals that exports to all major markets experienced a decline in October, reflecting the slowdown in orders. Sri Lanka’s largest apparel market, the United States, saw a 16.81 percent YoY decrease in exports, amounting to US $128.22 million. Similarly, exports to the EU (excluding the UK) declined by 24.79 percent YoY, totaling US $110 million. The UK market witnessed a YoY decline of 14.56 percent, with exports amounting to US $43.66 million. Other markets also saw a significant decrease of 21.69 percent, with exports totaling US $49.07 million.
The cumulative exports for the January-October 2023 period recorded a YoY decline of 20.5 percent, reaching US $3,748.72 million. Sri Lanka’s apparel industry, which is the country’s largest industrial export, earned US $5.95 billion in 2022 and employs approximately 300,000 individuals, predominantly women.
The JAAF predicts a decrease of approximately one billion dollars in this year’s apparel and textile export earnings compared to the previous year. This decline can be attributed to various factors, including rising inflation and interest rates, which have weakened consumer demand in Sri Lanka’s key apparel export markets. Additionally, the country has become less competitive in terms of apparel sourcing due to higher production costs resulting from the significant increase in electricity tariffs and other input costs.
In light of these challenges, Sri Lanka’s apparel industry is urging the government to provide support in expanding the country’s apparel export markets through bilateral and other trade agreements. Specifically, apparel manufacturers are calling for efforts to improve market access to India, particularly by increasing the duty-free quota on garments. Negotiations in this regard are currently underway under the I.
