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Domestic apparel shipments to the US feel the effects of an economic downswing as export growth slowed down to 2.49 per cent in the first two months of 2023.
Bangladesh received $1.46 billion this January-February period from its largest destination.
It was $1.43 billion in the corresponding period of 2022, according to the data available with OTEXA, an affiliate of the US Department of Commerce.
Last January, ready-made garment (RMG) exports witnessed double-digit growth of 15.44 per cent year on year while it recorded over 36-per cent growth in 2022.
The overall US apparel import in the last two months of the current calendar year, however, has declined by 11.86 per cent to $13.21 billion.
It was $14.99 billion during the January-February period of 2022.
Meantime, China and Vietnam-the key competitors of Bangladesh-also witnessed negative growth by 29.65 per cent and 10.62 per cent respectively during the same period in question, OTEXA showed.
Apparel exporters attributed economic slowdown, high inflation and interest rate in the USA to this decline in the demand for apparel.
They apprehend that this sluggish growth even may enter into negative territory unless the interest rate goes down in the USA.
Industry insiders say high demand for Bangladesh RMG products, a sharp rise in prices of raw materials that add up to the value of finished products, manufacturing of value-added garments and buyers' confidence in the local industry's resilience and compliance have helped exports sustain growth.
Bangladesh also benefitted from the US buyers' shift from China and China-plus policy.
But the Russia-Ukraine war has affected the demand, resulting in the high inventory of buyers and reduced work orders in recent months, they added.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) president Faruque Hassan said overall US import has fallen for economic slowdown, high inflation and interest rate, thus raising the mortgage rate there.
US consumers are prioritising their expenditure in paying house and car rents, and food costs as they drop apparel from their list, he explained.
As a result, the demand of RMG items declined, which also stock up the inventory of buyers, he told the FE, adding that buyers are now placing less work orders.
"We were receiving reduced work orders beginning last November but sustained the growth mainly because of production of value-added items and high raw material prices that pushed up the value of the products."
Growth slows as export in terms of quantity has fallen significantly, Mr Hassan said, adding that it would enter into a negative territory in the coming months.
OTEXA data shows the shipments the US received, he said, explaining that February goods were shipped at the end of December and early January.
The BGMEA issued about 22 per cent and over 26 per cent less UD (utilisation declaration) respectively in November and December 2022 than the same months of 2021, he added.
The OTEXA data for the first two months of 2023 also showed the same trend.
January-February shipments in terms of quantity, however, witnessed negative growth of 14.41 per cent to 453.81-million square metres, which were 530.20-million square metres in the corresponding period of 2022.
Talking to the FE, Brothers Fashion Ltd managing director Abdullah Hil Rakib attributed US economic turmoil to stunted job growth while many are retrenched and IT people are losing jobs.
Such a situation is shrinking the demand, especially for apparel and restricting consumers towards cautious purchase, said Mr Rakib, also a BGMEA director.
The US produces commodity items unlikely the EU that buys fast fashion. US retailers bought huge quantities last year and they have a huge stock now, he added.
"This is the main reason behind the local RMG performance there," Mr Rakib said, adding the situation might change with the resumption of US economy.
Apparel exporters, however, said the global demand is falling mainly because of an adverse impact of the Russia-Ukraine war.
Chinese share is decreasing due to a trade tension between the two countries, Chinese zero-Covid policy and the Uyghur issue, they added.
China's share in the US apparel market was 37.32 per cent in 2013, which fell to an estimated 21.75 per cent in 2022, according to the data.
On the other hand, Bangladesh's share rose to 9.75 per cent last year, which was only 6.20 per cent in 2013.
During January-February 2023, the US imported apparel worth $2.53 billion from China, which was $3.59 billion during the corresponding period of 2022.
Vietnam exported apparel items worth $2.36 billion during the period, which was $2.64 million in corresponding period of 2022, disclosed the data.
Meanwhile, US apparel imports from India during the period witnessed meagre growth of 0.41 per cent to $880 million while Cambodia recorded 29-per cent negative growth and earned $471 million respectively.