After a dull season, the RMG demand in the USA market led to a strong rise in work orders from international clothing retailers and brands. Bangladesh garment manufacturers also received much-needed relief from this surge. It was forecasted by National Retail Federation in October that the holiday sales in the USA during November and December could go up by 8%, as much as 960 billion.
According to Matthew Shay, CEO and President of NRF, “While consumers feel the pressure of inflation and higher prices and there is continued stratification with consumer spending and behavior among households at different income levels, consumers remain resilient and continue to engage in commerce.”
Reuters reported early in November that USA consumer prices rose less than expected in October. This was the first time in eight months that the annual increase in price was less than 8%, which clearly indicated that the inflation was slowly washing away. However, in both September and October, the consumer price index went up by 0.4%. As per Reuters asking, Economist said that the CPI might rise by 0.6%.
According to Bangladeshi apparel exporter and chairman of Envoy textiles, Kutubuddin Ahmed, work orders from the USA are coming back slowly. That’s why with the beginning of this year’s Christmas sales in the western region, last season’s stock leftovers are decreasing swiftly.
He said, “Fortunately, it seems the inflow of work orders will continue to grow gradually as western people missed three consecutive Christmases amid the Covid-19 pandemic. My assessment is that this Christmas will see sales on a massive scale.”
In the past three months, Bangladesh was receiving fewer orders from international buyers as they were unable to sell garment items due to the severe fallouts of the Ukraine- Russia War. Moreover, the warehouses were full of last year’s deliverable inventory, but as the inflation is cooling down and USA sales are rising, their warehouses are emptying. According to an industry expert, the country has received 20 percent fewer orders from buyers, compared to the same season last year.
Ha-Meem group chairman and international RMG exporter, AK Azad said, “Thanksgiving sales this year are not expected to be as high. So, it is predicted that the consumers’ response in the upcoming Christmas may also not be as upbeat as projected. This means the inflow of orders from international retailers and brands may not pick up until August next year.”
Although sales are picking up in small numbers, the prices are not increasing. Local spinners are selling yarns at a 20 percent low price, only to get rid of their old stock. However, Bangladesh has started receiving more orders from China, so it’s expected that local yearn prices will go up as the demand rises.
Higher officials at BGMEA said a lot of inquiries, not work orders, are coming from international buyers for the next spring season. Although the work order incoming is picking up slowly, hopefully soon, it will pick up, like in February and March. They admitted, there are few factories that are receiving a lot of orders, but that’s also from a very specific category.
BGMEA President, Faruque Hasan said, “since the war is making the troubled European market even more unstable, local exporters have started to focus on the Asian and Middle Eastern markets.”