Sri Lanka’s Apparel industry has re-affirmed its resilience in achiving an export target of US$ 6 billion this year despite global economic recession and resulting softening of international consumer demand,
The Joint Apparel Association Forum (JAAF) has urged the new administration for systemic economic and political reforms to restore stability, and rebuild trust and confidence in the nation – locally and globally.
Highlighting the impact of the ongoing volatility on the sector, JAAF noted that Sri Lanka’s apparel sector had continued to display outstanding resilience by continuing to fulfill all existing orders and production schedules in the face of unprecedented adversity.
However, at a time when global consumer sentiment is expected to weaken and many in the industry bracing for a potential reduction in orders by as much as 20% in the next season’s orders (June to August).,
The association warned of serious negative consequences if policy makers continued to delay on the sweeping reforms needed to put Sri Lanka back on track.
Accordingly, JAAF called on the new administration to immediately commence discussions to introduce credible policy with industry experts towards rapid development of a practical, apolitical Roadmap for Sri Lanka’s Economic Recovery.
Secretary General of JAAF Yohan Lawrence stressed that the need of the hour is to ensure that Sri Lanka continues to maintain the confidence of its buyers by remaining resilient amidst the coming global economic crisis.
Earnings from textiles and garments increased by 10.8% in the first quarter to $ 1.5 billion from $ 1.33 billion in 2021. In March earnings however fell by 0.6% to $ 464 million from $ 467 million compared to the same period a year earlier, as per the latest external sector performance report of the Central Bank.
Exports of apparel and textiles increased to $ 445.79 million, up by 22.12% YoY in April, the provisional data released by the Export Development Board (EDB) showed.
Sri Lanka’s apparel sector contributes 6% to the country’s GDP and accounts for 40% of all exports. The sector provides direct employment to 350,000 workers and an additional 700,000 who receive livelihood opportunities as part of the greater supply chain.
The industry’s 2030 vision is to transform Sri Lanka into a global apparel hub, whilst the intermediate goal is to increase annual export earnings to $ 8 billion by 2025.
“Owing to unprecedented national economic mismanagement, this sector, which has long served as a fundamental pillar to the Sri Lankan economy, is now under serious threat, Mr Yohan Lawrence said adding that any plan for economic revival must prioritize support to apparel manufacturers large and small,..
Over the course of 2021, Sri Lanka’s apparel sector increased its earnings by 22.9% Year-on-Year (YoY) generating US$5.42 billion in export earnings, and accounting for almost half of all merchandise exports, in addition to providing gainful employment for a workforce of approximately 1 million (direct and indirect).
Moving forward, Lawrence noted that the apparel sector’s most urgent need was a stable energy supply to ensure operational continuity.
“Large Sri Lankan apparel manufacturers have been among the most effective adopters of renewable energy technology, particularly solar energy. Together with other optimizations in energy consumption, these proactive measures have mitigated some of the worst disruptions to production, he pointed out.
“In addition to economic reforms, JAAF also reiterated the demand from the Joint Chambers calling for the abolition of the 20th Amendment to the constitution as a first step to driving systemic reform of Sri Lanka’s political culture.
“.Without this systemic change, we cannot achieve the stability necessary to navigate our way out of the current crisis,” Lawrence stated.