Three forces compressing capacity
Energy is the biggest constraint. Bangladesh**;s gas supply is running about *,*** million cubic feet per day below demand, with factories designed for ** psi often receiving just *–* psi, leaving production lines underutilised. Industrial gas prices for new connections also rose ** per cent in April ****, adding to operating costs.
Credit is the second constraint. Commercial lending rates are near ** per cent, while Bangladesh Bank**;s cap for large-industry term loans is **.** per cent. With garment margins well below borrowing costs, many suppliers can neither finance expansion nor sustain normal operations.
Input inflation is the third pressure. Yarn prices rose about ** per cent in FY**, dyes and chemicals **–** per cent, and wages * per cent, while buyers largely refused higher sourcing prices. As a result, factories are operating at just **–** per cent of capacity. Bangladesh Garment Manufacturers and Exporters Association (BGMEA) says *** member factories have sought government support, and around **,*** workers were laid off in the first half of ****.
