low cost base and large, young population have encouraged the rapid growth of the textiles and garments sector in Bangladesh, making it a leading supplier of ready-made garments to the West. The strong foothold Bangladesh has in this market will underpin growth in total merchandise exports over the coming decade.

5 export dest

  • The trade confidence index rose from 103 in H2 2013 to 141 in H1 2014, the second highest amongst our sample of 23 countries.
  • Bangladesh’s share of the global ready-made garment market has grown strongly in recent years, supported by its low cost base and large labour force.
  • The country is seeking to boost its longer term trade prospects by freeing up trade with many of its neighbours.

Current trade position

Export values of ready-made garments rose by 13% on the year in the first five months of 2014 after growing by 11.7% last year. The US and the EU are the key export markets, taking almost two thirds of Bangladesh’s total exports last year and demand from these markets has picked up this year.

Spotlight: Textiles and Garments

Why Textiles and Garments are important

Bangladesh has a large young population and costs of production are lower than in China. This presents opportunities for growth in low cost manufacturing sectors such as textiles and garments, which have been key drivers of growth in the economy. The apparel industry alone employs around 4m workers, with 70% being women.

Trade in Textiles and Garments goods for Bangladesh (2014-30)

Simon Cooper, Chief Executive of HSBC Commercial Banking.

“Businesses can’t afford to fixate on the risks posed by today’s geopolitical problems and uneven rates of growth at the expense of their future planning. Conditions have undoubtedly been tough for trade recently, but we are now turning a corner. The medium and long term prospects look significantly better for businesses that have prepared themselves for recovery in both developed and developing markets.”

Key findings

  • Ready-made garments make up around 80% of total merchandise exports from Bangladesh, with the value of exports in this sub-sector being greater than exports from India.
  • In 2013 half of Bangladesh’s exports of garments and textiles went to Europe and a quarter went to the US.
  • Amongst the 25 economies in the HSBC Trade Forecast, we expect Bangladesh’s share of textiles and garment exports to rise from 2.8% in 2010 to 3.8% in 2020.
  • The authorities have introduced new safety laws for textile factories to strengthen standards, which has helped to reinforce established relationships with international buyers and in turn should help the industry to expand production.
  • The 77% increase in minimum wage for garment workers implemented in December 2013 will add to firm’s costs, but the industry is expected to remain competitive in global markets.
  • To improve longer-term growth prospects, Bangladesh will need to raise labour productivity and move into higher value-added textile sectors.

Short-term snapshot


Bangladeshi exports rose by 11.9% in 2013 and have risen at a similar pace in the first five months of 2014. Over 70% of survey respondents said the outlook for trade volumes will improve over the next six months, with almost 80% expecting the currency to have a favourable impact on business growth over this period.

HSBC Trade Confidence Index

HSBC ENThe trade confidence index rose sharply from 103 in H2 2013 to 141 in H1 2014 – the second highest in the sample of 23 countries – underpinned by strong demand from the West for Bangladeshi garments and textiles. The authorities are introducing more safety regulations to the garments sector and this appears to have provided an additional boost to confidence.

Cross-border business

40% of survey respondents said that Europeoffers the best opportunity for business growth over the next six months. One-third of respondents said Asia and 17% said North America.

Regional export flows

Corridors of choice

  • More than a third of respondents  expect demand in key markets to be higher over the next six months while more than 16% generally feel more confident about the coming months.
  • The US$ is the currency of choice for more than 85% of survey respondents. Nearly 80% see currency movements having a positive impact on trade over the next six months while more than two thirds see trade agreements as favourable for international business.
  • But around a quarter of survey respondents cited high costs of logistics, shipping and storage would potentially as potential constraints on business growth.

Opportunities for business

New safety laws for textile factories introduced after a series of disasters could  boost investor confidence. Meanwhile, the country has the fourth largest population in Asia and the working age population is growing. Investment should be increasingly aimed at services and consumer products to take advantage of this trend.

Longer-term outlook

Expectations for the global economy

The Eurozone, Bangladesh’s biggest trading partner, is now growing steadily again, albeit very modestly, and global demand is expected to continue to pick up. Within Asia, trade flows improved modestly in Q2 and recent data on PMIs and Hong Kong container shipments suggest this improvement is likely to continue.

Corridors to watch

We expect Bangladesh to grow rapidly over the remainder of the current decade, and investment – particularly infrastructure – will continue to grow strongly to support this.  Industrial machinery is the second largest import sector behind textiles and this will continue out to 2030 with the sector contributing almost 20% of Bangladesh’s import growth. China, India, Korea and Indonesia will be Bangladesh’s fastest growing import partners, taking advantage of geographical proximity.

Nonetheless, the US, Germany and the UK are Bangladesh’s top export partners and this will be unchanged out to 2030 thanks to strong demand from the West for textiles and garments.

Amongst the 25 economies in the Trade Forecast, Bangladesh gets around 20% of its imports from China and by 2020 this share will have risen to closer to 30%. Other Emerging Market economies in Asia will also gain market share in Bangladesh at the expense of developed economies.

More than half of the Bangladesh’s population is employed in agriculture and animal products is the third biggest export sector, contributing almost 10% of export growth from 2014-16. But as more of the population gradually moves into urban areas, agriculture will decline in relative importance.

Bangladesh’s projected sector contribution increase in merchandise exports

Focus on Textiles and Garments


  • Textiles and garments are Bangladesh’s most important export sector: between 2014 and 2030 we expect textiles, clothing and apparel to contribute almost 80% of merchandise export growth (reflecting a broadly stable share in total exports).
  • Bangladesh has the fourth largest population in Asia and unlike in many other more advanced countries, the working age population will grow steadily over the whole forecast period, providing textile and garment firms with ample labour supply.
  • The recent tightening of industry safety regulations should also give companies more confidence over the longer term.


Bangladesh’s share of the global ready-made garment market has grown strongly in recent years, supported by a low cost base and large labour force. The country is seeking to boost its trade prospects further by freeing-up trade with many of its neighbours, hoping to broaden its export base into higher value-added production and encourage FDI.

About the HSBC Trade Forecast – Modelled by Oxford Economics

Oxford Economics has tailored a unique service for HSBC which forecasts bilateral trade for total exports/imports of goods, based on HSBC’s own analysis and forecasts of the world economy to generate a full bilateral set of trade flows for total imports and exports of goods, and balances between 180 pairs of countries. Oxford Economics produces a global report for HSBC, as well as country specific reports on the following 23 countries: Hong Kong, China, Australia, Indonesia, Malaysia, India, Singapore, Vietnam, Bangladesh, Canada, USA, Brazil, Mexico, Argentina, UK, France, Turkey, Germany, Poland, Ireland, UAE, Saudi Arabia, and Egypt. The analysis also includes trade with Japan and Korea for a total sample of 25 key trading nations.

Oxford Economics employs a global modelling framework that ensures full consistency between all economies, in part driven by trade linkages. The forecasts take into account factors such as the rate of demand growth in the destination market and the exporter’s competitiveness. Exports, imports and trade balances are identified, with both historical estimates and forecasts for the periods 2014-16, 2017-20 and 2021-30. Sectors are classified according to the UN’s Standard International Trade Classifications (SITC) system at the two-digit level and grouped into 30 sector headings. More information about the sector modelling can be found on

About the HSBC Trade Confidence Index:

The HSBC Trade Confidence Index is conducted by TNS on behalf of HSBC in a total of 23 markets, and is the largest trade confidence survey globally. The current survey comprises six- month views of 5,200 exporters, importers and traders from small and mid-market enterprises on: trade volume, buyer and supplier risks, the need for trade finance, access to trade finance and the impact of foreign exchange on their businesses. The fieldwork for the current wave (11) was conducted between May – July 2014 and gauges sentiment and expectations on trade activity and business growth in the next six months.

Sector Focus – Methodology

This report also includes special sections on key industries – agriculture, energy, metals, pharmaceuticals, technology and textiles. Based on the same underlying forecasts used for the existing analysis of trends in bilateral trade flows, the report examines how exports/imports of these groups of products are expected to evolve over time. The definitions used in the report for each of these sectors are below:


·Live animals (SITC code 00)

·Meat and meat preparations (SITC code 01)

·Dairy products and birds’ eggs (SITC code 02)

·Fish, crustaceans, molluscs (SITC code 03)

·Cereals and cereal preparations (SITC code 04)

·Vegetables and fruit (SITC code 05)

·Sugars, sugar preparations and honey (SITC code 06)

·Coffee, tea, cocoa, spices (SITC code 07)

·Feeding stuff for animals (SITC code 08)

·Other edible products (SITC code 09)

·Beverages (SITC code 11)

·Tobacco (SITC code 12)


·Coal, coke and briquettes (SITC code 32)

·Petroleum and petroleum products (SITC code 33)

·Gas, natural and manufactured (SITC code 34)

·Electric current (SITC code 35)


·Metalliferous ores and metal scrap (SITC code 28)

·Iron and steel (SITC code 67)

·Non-ferrous metals (SITC code 68)

·Other manufactures of metals (SITC code 69)


·Medicinal and pharmaceutical products (SITC code 54)


·Office machines and automatic data-processing machines (SITC code 75)

·Telecommunications equipment (SITC code 76).

·Electrical machinery and appliances (SITC code 77)

·Professional, scientific and controlling instruments and apparatus (SITC code 87)

·Photographic apparatus and optical goods (SITC code 88)

Textiles and Garments

·Textile fibres (SITC code 26)

·Textile yarn, fabrics, made-up articles (SITC code 65)

·Travel goods, handbags and similar containers (SITC code 83)

·Articles of apparel and clothing accessories  (SITC code 84)

·Footwear (SITC code 85)





About Ehsan Abdullah

An aware citizen..

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