Apparel exports decline in Feb. amid weak demand, as Sri Lanka’s garment sector recorded a sharp year-on-year contraction driven by softening global markets. The downturn reflects broader international trends impacting major export destinations.
Apparel exports decline in Feb. amid weak demand across EU, US and UK markets
Apparel exports decline in Feb. amid weak demand, highlighting mounting pressure on Sri Lanka apparel exports as global market conditions continue to soften. According to provisional data released by the Joint Apparel Association Forum (JAAF), export earnings for February 2026 fell by 11.46% year-on-year to $361.2 million, reflecting a broad-based contraction across key markets.
The decline was most pronounced in the European Union, which recorded a steep 19.48% drop in imports from Sri Lanka. This was followed by a 5.67% decrease in exports to the United Kingdom and a 3.53% fall in shipments to the United States. Meanwhile, exports to other markets collectively declined by 18.54%, indicating that the global demand slowdown is not limited to specific regions but is widespread across multiple destinations.
The downturn has also impacted cumulative export performance for the year. During the first two months of 2026, Sri Lanka apparel exports contracted by 6.91% compared to the same period in 2025. While the US and UK markets showed relatively moderate declines, the significant drop in the EU, a critical market for Sri Lanka’s apparel sector, weighed heavily on overall export performance.
JAAF emphasised that the current trend reflects a global demand slowdown rather than a country-specific issue. The association pointed out that similar patterns are emerging across competing apparel-producing nations. Bangladesh, the world’s second-largest apparel exporter, reported a sharp 25.25% decline in exports to the EU in January 2026, falling to €1.43 billion from €1.91 billion a year earlier. This parallel contraction underscores a broader recalibration in global apparel demand, particularly in Europe.
Industry stakeholders note that weakening consumer demand, especially in developed markets, is a key driver behind the decline. Inflationary pressures, reduced discretionary spending, and cautious retail inventory management in major economies have collectively contributed to lower order volumes. As a result, apparel exporters across the region are facing a more challenging operating environment.
Despite the external nature of the slowdown, JAAF stressed that domestic factors remain critical in determining competitiveness. Structural cost pressures, logistics inefficiencies, and evolving sourcing expectations from international buyers continue to shape Sri Lanka’s export performance. In a more competitive global landscape, addressing these internal constraints is essential to maintaining market share.
The association highlighted the need for immediate policy and operational improvements to strengthen Sri Lanka apparel exports. Enhancing logistics efficiency, reducing operational costs, and improving market access are seen as key priorities. Industry analysts suggest that targeted interventions in these areas could help mitigate the impact of external demand shocks and position the sector for recovery when global conditions improve.
Apparel exports decline in Feb. amid weak demand also reflects changing dynamics within global supply chains. Buyers are increasingly diversifying sourcing strategies, seeking flexibility, cost efficiency, and resilience. This shift presents both challenges and opportunities for Sri Lanka’s apparel sector, which has traditionally positioned itself as a provider of high-quality, ethically manufactured garments.
Furthermore, the global demand slowdown is prompting apparel manufacturers to reassess production strategies and explore new markets. While Europe remains a key destination, exporters are increasingly looking to diversify into emerging markets to reduce dependency on traditional regions. However, such transitions require investment in market development, compliance, and supply chain adaptation.
JAAF reiterated that while the current downturn is concerning, it should be viewed within the context of a broader global adjustment. The decline in exports across multiple countries indicates that the industry is undergoing a cyclical correction rather than a structural collapse. Nonetheless, the ability of Sri Lanka apparel exports to recover will depend on how effectively both external and internal challenges are managed.
Apparel exports decline in Feb. amid weak demand at a time when the sector is striving to maintain resilience amid shifting global conditions. With coordinated efforts from policymakers, industry stakeholders, and exporters, Sri Lanka’s apparel industry can navigate the current slowdown and strengthen its position in global markets over the medium term.