Bangladesh has slipped down from fifth position to its current seventh position this year as a ‘preferred sourcing destination’ for the US apparel retailers, as per a recent study. The joint study was conducted by the United States Fashion Industry Association (USFIA) and the University of Delaware.
The study titled ‘2017 Fashion Industry Benchmarking Study’ states that Bangladesh RMG sector offers the most competitive pricing compared to other apparel manufacturing hubs. However, the country still misses out on being the preferred sourcing destination due to compliance issues. The study puts Bangladesh, Cambodia and India in the high-risk zone in terms of compliance.
About 61 per cent of the companies surveyed are currently sourcing from Bangladesh against 70 per cent in 2016. 34 executives from the US-based fashion companies interviewed between April and May this year underline that none of them is planning to significantly increase their sourcing percentage for Bangladesh. Only about 32 per cent expects to increase their garment sourcing from the country. However, a much different scenario was observed in 2015 and 2014 when 42 per cent and 50 per cent of the companies planned to soar their sourcing share from Bangladesh.
Additionally, the report claims that cheap labour costs offered by garment manufacturing hubs like Bangladesh, Vietnam and Cambodia might not remain as an advantage in the coming years. 73 per cent of the executives believe that labour cost will increase this year, followed by raw materials and shipping fees with 61 per cent and 58 per cent votes, respectively. Since these three are the key aspects on which any buyer decides the sourcing country, the surge will definitely affect Bangladesh’s (as well as other countries’) trade relations with the US retailers in the time to come.
