Published: 12:21 AM, 12 July 2026
Tailspin in RMG sector, exports plummet
Stitch by Stitch: Garments in Grey
Squeeze from all sides: Falling global demand, an energy crunch and domestic troubles have pushed Bangladesh's garment sector into a rough patch
Jobs on the line: More than 19,000 workers have lost jobs in six months as three to four factories shut down every month
Shifting ground: 256 factories have closed in three years while 323 new ones opened, yet exports still slid 1.64 percent last financial year
Bangladesh's ready-made garment sector is navigating a rough patch, squeezed by falling global demand, an energy crunch and a string of domestic problems.
An average of three to four factories are shutting down every month amid falling orders, energy shortages and, in some cases, labour unrest, costing the sector more than 19,000 jobs over the past six months, said Mahmud Hasan Khan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), bdnews24 reports.
Many factories, unable to run at full capacity, have shut down after years of losses.
New factories continue to open, but not fast enough to pull export earnings back into positive territory.
The sector, the country's largest employer, posted negative growth overall in the last financial year.
Garment exports had been climbing since the pandemic-era global recovery began.
Even half a month of halted production during the 2024 July Uprising left export earnings largely unaffected.
The following month, August, saw 7.2 percent growth, and exports stayed in positive territory through May the following year.
Growth ranged between 11.85 percent and 22.80 percent in seven of those 10 months.
Exports then fell 6.31 percent in June 2025, though the year still closed with 8.84 percent overall growth.
Garment exports fell 4.75 percent in August last year, marking the start of an eight-month negative streak that ran through March.
Two months after the national election, exports abruptly jumped 31.21 percent in April, only to fall again by 8.29 percent in May.
With nine of 12 months in negative territory, overall garment export earnings for the just-concluded FY2025-26 fell 1.64 percent from the previous year, to $38.70 billion.
256 Factories Shut
Amid the sector's swings, factories have both closed and opened.
The BGMEA figures show 256 factories shut over the past three years and two months, while 323 new ones opened in the same period.
Factory closures totalled 35 in 2023, 77 in 2024, 141 in 2025, and three more through February this year.
New factory openings totalled 135 in 2023, 106 in 2024, 85 in 2025, and 18 in the first two months of this year.
The BGMEA's active factory count stood at 2,127 as of end-February.
Global Demand Weakens
Eurostat data indicate European Union countries cut garment imports from the global market by 10.42 percent in the first four months of this year, spending $27.77 billion, down from the same period last year.
Bangladesh's exports to the EU, its largest market, fell 19.33 percent over the same four months, to $6.09 billion, down from $7.54 billion a year earlier.
According to, Export Promotion Bureau (EPB), exports to Europe fell 3.29 percent in the just-ended FY26,to $19.06 billion, reversing the 9.10 percent growth to $19.71 billion recorded the previous year.
Other markets fared better: garment exports rose 2.63 percent to the US, 0.91 percent to the UK and 3.2 percent to Canada last financial year, reaching $7.74 billion, $4.39 billion and $1.34 billion respectively.
Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue (CPD), said exports have broadly slowed for most countries, not just Bangladesh, largely due to the uncertainty stemming from Donald Trump's reciprocal tariff policy.
"Bangladesh's export competitiveness faces stiff competition. Other countries are pulling ahead in exports. Our competitive edge is steadily eroding. That's a warning sign for us," he added.
Rahman also pointed to the rising cost of doing business. "Our cost of doing business isn't falling, it's rising. I believe both global and domestic factors are behind our export slide."
The expert said steps proposed in this year's budget, including opening up bond facilities, faster product clearance against bank guarantees, and raising the limit on raw material storage in bonded warehouses, would offer entrepreneurs some relief if implemented.
Old Players Folding Apparel21, a successful venture under the Lithe Group which has been in the business since the 1990s, recently went out of business.
The company spent the last four years operating under capacity due to a dearth of export orders and finally put up a closure notice after failing to absorb successive losses.
Similarly, an Al Muslim Group factory closed down following the recent Eid-ul-Azha, putting 1,800 employees out of work.
Finding it impossible to keep operations afloat, Unique Washing and Dyeing and Unique Designers in Gazipur also halted production.
Following the fall of the Awami League government during the student-led mass uprising, high-profile tycoons like Salman F Rahman of the Beximco Group and Nazrul Islam Mazumder of the NASSA Group -- both known for their close ties to the ousted regime -- landed in jail.
Their massive industrial units have ground to a halt following severe liquidity crunches after banks turned off the credit tap.
Over a hundred non-BGMEA factories, which employed thousands of workers, have also gone under in the past three years.
This string of factory closures has hit the industrial component of the Gross Domestic Product (GDP).
Provisional data from the Bangladesh Bureau of Statistics (BBS) shows industrial sector growth for FY2026 slowed to 2.86 percent, down from a finalised 3.71 percent growth rate in the preceding year.
BGMEA chief Khan told bdnews24.com that while the shut factories make headlines, many others are currently keeping their doors open despite running at a loss.
He pointed out that closing a factory is not something that can be done overnight and raised questions about how long these struggling businesses can survive.
He remarked that the energy crisis and sudden power tariff hikes bode ill for the industry, suggesting that only those who can absorb the shocks will pull through.
Asked whether new factories can offset the job losses, Khan said: "Businesses will rise and fall, ownership will change hands, old factories will close, new entrepreneurs will emerge, that's how it always goes.
"Whether the shortfall gets made up is hard to say in broad terms. A proper study might give us a clearer picture."
According to him, more than 19,000 workers have lost their jobs over the past six months due to factory closures.
BGMEA Director Faisal Samad said global garment demand fell after the COVID-19 pandemic and the Ukraine war, a shock that hit many Bangladeshi factories hard, compounded by inefficiencies specific to individual factories.
"Every factory's story is different. Some shut down because owners didn't want to keep bleeding money. Some had no other option.
"Others could keep running profitably by scaling back production, but chose not to. Energy issues factor into this too."
The BGMEA is conducting a study on why factories are closing and what impact this is having on the garment sector, expected to be completed by this month.
Asked whether the findings would be made public, Samad said: "We'll share the findings."
Rahman of CPD said the closures have not happened overnight.
He told bdnews24.com that several large factories remain at risk of closure, and if they cannot weather the situation, employment could face serious pressure ahead.
A shrinking industrial workforce would spill over into other sectors' labour markets, driving down wages overall, he said.
Resolving the energy crisis alone, Rahman said, would go a long way toward restoring confidence among entrepreneurs.
Mohiuddin Rubel, managing director of Denim Expert Limited, said: "It's true that orders are falling, but there are also issues specific to individual factories. Some are still running on outdated technology, making survival difficult for them.
"If we want to keep this sector alive, the government needs to stand by entrepreneurs too."
Asked which areas needed government support, he said: "It has to be case by case. Some need help with energy, others need financing more. We need a proper study to get an accurate picture."
Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), noted three to four factories across knitting and textiles are closing every month.
With a political government now in place, he said, new factories are entering the market and more will follow, but the sector needs an overall roadmap to help small and medium factories survive.
