Sri Lanka’s apparel exports recorded a broad-based decline in February 2026, reflecting mounting pressure across key global markets. Total exports for the month fell by 11.46% year-on-year to US$361.2 million, with notable contractions in the EU (-19.48%), USA (-3.53%), UK (-5.67%) and other markets (-18.54%).
This trend continued into the cumulative performance for the first two months of the year, with total exports declining by 6.91% compared to the same period in 2025. While reductions in the USA and UK remained relatively moderate, sharper slowdowns in the EU and other regions point to weakening demand conditions and intensifying competition across export destinations.
Importantly, the downturn is not unique to Sri Lanka. Regional competitors are experiencing similar pressures. Bangladesh, the world’s second-largest apparel exporter, reported a 25.25% decline in exports to the EU in January 2026, falling to €1.43 billion from €1.91 billion a year earlier. The scale of contraction in Sri Lanka’s largest competing market suggests a broader correction in European demand rather than a country-specific loss of competitiveness.
Taken together, the data indicates a global recalibration rather than an isolated downturn. For Sri Lanka, this provides important context for the current export slowdown, with external demand softening particularly in Europe, a critical market for apparel exporters across the region.
However, while demand-side pressures are shared, the capacity to respond remains uneven. Sri Lanka’s operating environment continues to be shaped by structural cost pressures, logistics inefficiencies and evolving sourcing expectations from global buyers. In this context, competitiveness is determined not only by external conditions but also by how effectively domestic constraints are addressed.
The Joint Apparel Association Forum (JAAF) stated that the decline reflects broader global demand softening, particularly in Europe, now evident across the region. It noted that Bangladesh’s sharp fall in EU exports reinforces the view that this is a wider market correction. At the same time, JAAF emphasised that in a more competitive environment, domestic constraints become increasingly critical. Improving logistics efficiency, ensuring cost competitiveness and strengthening market access must now be treated as immediate priorities if Sri Lanka is to retain and expand its position within global apparel supply chains.
