How does the pandemic affect the Bangladeshi clothing industry?

As a result of the current pandemic, the clothing industry in the Asia-Pacific region is experiencing a dramatic decline in retail sales in key export markets. Problems in the supply process are affecting countries such as Bangladesh, Cambodia, China, India, Indonesia, Burma, Pakistan, the Philippines, Sri Lanka and Vietnam, among others.

A recent study carried out by the International Labour Organisation states that these circumstances have consequences not only for supply chains but, in particular, hit workers. Redundancies in current employment are rising sharply, while re-opened factories often work with a reduced workforce.

Examples from May 2020 show that only 3.9% of Bangladeshi suppliers decided to continue employing all their previous workforce. By contrast, as many as 43% of Bangladeshi’s factories operate on a smaller scale than before, as they work with less than 50% of the original workforce.

Around 230 749 workers in the ILO’s Better Work Bangladesh (BWB) factories are still not working due to the reopening of the factories, which represents 41% of all workers in the BWB programme.

According to ILO BWB data, one in five workers was receiving wages later than the legally defined seven working days.

“Fortunately, many exporters have resumed production in the last few months. At the same time, these thriving companies and workers in Bangladesh are having to deal with an ongoing pandemic and provide safe conditions for everyone,” said Tuomo Poutiainen, ILO Bangladesh’s national director.

The Asia-Pacific region employed around 65 million workers in the clothing sector in 2019, which represents 75 percent of all workers in the clothing industry worldwide.

Unfortunately, since September 2020, almost half of all jobs in the clothing manufacturing sector have been entirely dependent on demand for these goods from consumers living in countries with the most stringent restrictions, where retail sales have fallen sharply.

According to UNCTAD figures, Bangladesh’s total exports of clothing amounted to USD 33.6 billion in 2019, and almost one in nine women are employed in the country’s clothing sector. Until June 2020, total imports from Bangladesh have fallen by as much as 29% since the beginning of the year, compared with the same period in 2019. Comprehensive data on the resulting fall in clothing orders by country is not available, but a Better Buying survey of 179 suppliers from 30 countries, including Bangladesh, conducted in May 2020,  showed that 64% of the clothing factories received order cancellations from customers.

Aleksandra Zakrzewska