Sri Lanka's key industrial export, the apparel sector, experienced a notable setback in its performance for the entirety of 2023, with earnings contracting by 19 percent year-on-year (YoY).
The sector's export revenue for the year amounted to US $4.5 billion, showcasing a decline compared to the robust performance seen in 2021 and 2022.
While the 2023 figure is an improvement from the pandemic-hit year of 2020, where earnings stood at US $4.15 billion, it represents a contraction from the heights reached in 2021 (US $5.01 billion) and 2022 (US $5.6 billion).
Provisional data from Sri Lanka Customs indicated a broad contraction in exports to all markets in 2023 compared to the previous year.
The United States witnessed the largest contraction, with exports dropping by 22 percent, while exports to the European Union, United Kingdom, and other markets also declined by 17 percent, 13 percent, and 18 percent, respectively.
Examining the sector's performance in December 2023, export revenue dipped by 8 percent YoY to US $415 million. Although exports to the United Kingdom showed a modest 1.7 percent growth, exports to the United States, European Union, and other markets declined by 5 percent, 12 percent, and 13 percent.
Since September 2022, the apparel export earnings have been on a downward trend, primarily attributed to the economic slowdown in major Western markets. However, comparing the performance with November 2023 reveals a positive sign, as the sector experienced a 12 percent month-on-month (MoM) growth.
