Some 1,200 garment factories have closed down in Bangladesh over the last four years because of their lack of compliance and falling behind in the competitive landscape.
It is feared falling profits will lead to the closure of some more factories. Bangladesh’s garment products have been losing competitiveness because of longer lead time, poor productivity and poor demand for apparel worldwide.
In 2014, the global market size for apparel was $483 billion; in 2017, the figure declined to $454 billion. Between 2014 and 2018, the prices of Bangladesh garment items declined in the US market by 11.72 per cent while the cost of production increased 29.54 per cent.
Similarly, the prices of Bangladesh’s garment items declined in the EU markets. But at the same time, garment owners have spent on fixing electrical and structural loopholes as per the recommendations of Accord and Alliance. The cost of production will go up further after the implementation of recommended minimum wage from December this year. Wages comprise nearly five per cent of the total production cost of garment items.
The garment sector has been witnessing a peaceful and calm situation over the last four years as have been no incidents of unrest. But a lot of workers will lose their jobs if any garment factory is shut down for any reason.