Bangladesh's Garment Exports to the US Rebound Sharply After a Rough Spring

Five months after diesel shortages, surging freight costs and jittery Western retailers had garment sector leaders warning of a gathering storm, Bangladesh's apparel exports to the United States have quietly turned into one of the better news stories the sector has had in a while. Shipments to the US rose 11.42 percent year on year to 1,612.92 million dollars in the July-August period of the current fiscal year, up from 1,447.60 million dollars in the same two months last year, according to Export Promotion Bureau data reported on September 15. August alone did the heavy lifting, with earnings jumping 25.65 percent from a year earlier to 817.13 million dollars, more than making up for a nearly flat July that had ticked down 0.18 percent to 795.79 million dollars.

The United States remains Bangladesh's single most important export destination for ready made garments, accounting for 20.8 percent of the country's total 7,744.61 million dollars in RMG exports to the US market over the whole of FY26. That concentration is exactly why the sector watches monthly US figures as closely as it does. A stumble in American demand shows up in Bangladesh's export numbers faster and more visibly than almost any other market shift.

A sharp turn from where the sector stood in the spring

The scale of the turnaround is easier to appreciate against where things stood earlier this year. In April, industry leaders were warning that Western retailers planned to cut apparel orders by 8 to 10 percent for the coming season, citing unsold inventory piling up in stores and weakening consumer demand. Bangladeshi factories were simultaneously grappling with diesel shortages that forced two to three hour power cuts, and up to eight hours in some cases, pushing manufacturers toward expensive air freight just to hit shipping deadlines. Truck freight between Dhaka and Chattogram had jumped roughly 20 percent, from around Tk38,000 to Tk50,000 per truck, and yarn costs were up 17 to 18 percent on rising cotton prices. US bound exports had actually declined 2.54 percent during the July-March stretch of the prior fiscal year, and BKMEA president Mohammad Hatem was warning at the time that Turkey's proximity to Western markets and more reliable energy supply gave it a structural edge Bangladesh could not easily match.

Against that backdrop, an 11.42 percent rise in US shipments looks less like routine growth and more like a sector that clawed its way back from a genuinely difficult stretch. The recovery lines up with a broader rebound Bangladesh Bank's own quarterly data captured for the April-June quarter, when overall RMG exports rose 11 percent year on year to 10.10 billion dollars, suggesting the improvement in the US market is part of a wider recovery rather than an isolated blip in the trade figures.

What is different about August

The month by month pattern is worth sitting with. Average monthly earnings for July-August FY27 came in at 806.46 million dollars, about 25.65 percent higher than the full year FY26 monthly average of 645.38 million dollars, but that headline average hides how lopsided the two months actually were. July's 795.79 million dollars was essentially flat with the year before, a continuation of the sluggishness that had defined the sector for much of the prior fiscal year. August's 817.13 million dollars, by contrast, represented a genuine acceleration, not just an improvement over a weak base.

Former BGMEA director Mohiuddin Rubel, reacting to the July-August figures, said the US market's performance would remain critical for Bangladesh's apparel sector as exporters try to sustain growth in what he called a challenging global trading environment, a framing that fits the whiplash the sector has experienced over the past several months, from order cut warnings in April to double digit US growth by August.

Period	RMG exports to US	Change
July FY27	$795.79 million	-0.18% YoY
August FY27	$817.13 million	+25.65% YoY
July-August FY27 combined	$1,612.92 million	+11.42% YoY
July-August FY26 (year earlier)	$1,447.60 million	reference period
Full FY26 total RMG exports to US	$7,744.61 million	20.8% of total RMG exports
Q4 FY26 (Apr-Jun) total RMG exports, all markets	$10.10 billion	+11% YoY

Why the recovery is fragile rather than settled

None of the structural pressures that worried industry leaders in the spring have fully disappeared. Diesel and broader energy supply for factories remains a live concern, tied to the gas and electricity crunch that has forced zonal rationing for garment plants and shaped nearly every major Bangladeshi economic story this month, including the tax relief the government extended on solar equipment imports specifically to help energy hungry industries cope. Yarn and raw material costs tied to global cotton prices have not reversed course in any meaningful way, and the competitive pressure from Turkey and other suppliers with steadier energy access has not gone away either.

What has changed is demand. Whatever caution Western retailers were signaling in April about trimming orders has not shown up, at least not yet, in the US shipment numbers for July and August. Whether that holds through the crucial autumn and winter ordering season, when American retailers typically place the bulk of orders for spring apparel, will say more about the durability of this recovery than any single month's figures can. For a sector that supplies more than 80 percent of Bangladesh's total export earnings, the difference between a real turnaround and a temporary bounce carries weight well beyond the garment industry itself.