Major Southeast Asian textile and apparel exporters have reported lower exports in May, compared to a month earlier. Exports were however, much higher compared to the same period a year ago.
Textile and apparel exports of Bangladesh and India reportedly fell by more than 10%. Pakistan’s exports were down 5.6%. Vietnam reported slightly higher exports. Overall, exports value of the four countries in total, dropped by 10.3%.
In addition, Bangladesh, Pakistan and Vietnam recorded their first month-on-month textile and apparel exports decline in 2022, even as India’s exports have been recording a fall for the last two consecutive months.
In 2022, many countries are facing high inflationary pressures, eroding market confidence and pushing down consumption, which is having a visible impact on the Southeast Asian textile and apparel manufacturing and exporting countries.
The US and China have reported major fall in retail sales, even as European Union and Japan are faced with a slightly less severe fall.
Another factor explaining the fall in exports of the four countries is the return of orders to China, as the pandemic related lockdowns were eased. During April, China exports grew by only 1.4%, but rebounded up immediately after the relaxation in May, with a year-on-year growth of 20.2%. The exports of the five Asian countries in May rose by 13.4% month-on-month, so the decline in the Southeast Asian textile and apparel exports in May might not be a direct manifestation of inflationary pressure, but may also have to do with the return of orders to China.
The recent inflation data released by various countries have once again aroused market concern. US’s CPI rose 8.6% in May year-on-year, a 40-year high; EU’s CPI rose 8.1% in May year-on-year, an all-time high; Japan’s CPI in May has not yet released, which is predicted to be 2.5%, the highest in seven years.
US’s retail sales in May, announced on June 16, fell for the first time in five months, with prices rising and retail sales falling, indicating that inflation has dealt a blow to consumers’ desire to spend to a certain extent. In the second half of 2022, the world has entered an interest rate hike cycle. In the background of the epidemic and war, the risk of economic recession increases, consumption may continue to be sluggish, and the Asian textile and apparel exports will be not optimistic.