Sri Lanka’s apparel-sector growth prospects will diminish, academic says
18/01/2016
Speaking at the 2016 Sri Lanka Economic Forum on January 7, Warwick University’s professor of economics, Christopher Woodruff, said that he thinks Sri Lanka will, for the most part, hold onto its garment industry, but that once other low-cost competitors such as Myanmar, Ethiopia and Cambodia come fully into the market Sri Lanka will find it harder to compete and growth levels may slow.
In 2015, apparel exports are estimated to have brought in $5 billion in revenue, around 50% of all of the country’s manufactured goods exports. Professor Woodruff said at the event: “Sri Lanka is going to find it much harder to compete in the garment sector. But China is still around one-third of the world’s exports in apparel and wages in China have tripled in the last ten years. There’s a lot of movement out of China, a lot of investment from China into other countries in the garment sector. That movement out may slow the diminishment of the sector here in Sri Lanka.”
The professor went on to explain that apparel manufacturers can also continue to have success in Sri Lanka by moving into different types of products, by increasing productivity and by maintaining good relationships with buyers. “However, as wages go up, the prospects for growth and the prospects for this [the apparel industry] being a driving sector are diminished,” he said.
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