The share of textiles in total private sector investment dropped to 53.63 per cent in nine months of fiscal 2007-08 from around 70 per cent during the same period a year ago.
According to the Board of Investment (BoI) provisional statistics, the total private investment was worth Tk 138.63 billion during July-March period in 2007-08 against more than Tk 160.0 billion in the corresponding period of the previous year. The investment was 196.58 billion in 2007-06.
Although the average monthly investment in all sectors dropped by only 6.0 percentage points in the concluding fiscal the decline of the same in the textile sector was higher, said the BoI statistics.
Experts said the country's textile and garment sector witnessed poor investment during the year due to 'anti-corruption drive' and price hike of capital machinery and raw materials.
They said the 'fear factor' due to the anti-corruption has now almost gone, but a nagging gas crisis has become a big problem holding back the new investment.
The continuous fall in investment in the country's textile and garment sector will dampen the country's garment export growth, said Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) president Fazlur Rahman.
"Due to the drop in investment, export growth of the garment and textile sector will face stagnation," he said.
However, the country's textile and garment sector, accounting for more than 75 per cent of the annual export, staged a turnaround in second half of fiscal 2007-08 from a negative growth in the first half.
The export, however, grew 16 per cent in the first eleven months of the last fiscal.
The main reasons behind the surge in garment orders and export are the rising production and labour costs in the countries like China, India and Vietnam forcing the international buyers to turn to Bangladesh.
"Export orders are still increasing," he said, adding that the local exporters would not be able to execute all the export orders properly due to less investment.
"The country must need new investment to sustain the growth rate," he said.
Bangladesh Textile Mills Association (BTMA) president Abdul Hai Sarker said the gas crisis is now a big problem.
The problem is forcing the investors to shelve new investment plan although there is much improvement in services in Chittagong port and a peaceful atmosphere.
The turn around time in the country's main sea port in Chittagong has reduced to two and half days from previous seven days.
"We fear the negative investment trend will continue in the new fiscal as the gas shortage is severely discouraging the new investments," he said.
