A mixed bag of recovery

The country's economy has been experiencing mixed levels of recovery since businesses reopened on May 31.

The market for daily essentials and consumer goods that made a turnaround in July plummeted by 10-15% in August, and sales of steel, cement and electronics saw some nuggets of hope with a surge in demand. But the service sector was still going with less than half the pace at normal times.

Businesspeople link the growth in some sectors to people's venturing out to fulfil their demands that were pent up during the shutdown period.

Changing circumstances, triggered by the coronavirus pandemic, have also created demands for new products, contributing to the surge, they say.

However, private airlines, transport, tourism and businesses of restaurants, shopping malls and luxury products, etc, which reeled the most under the effects of Covid-19, are now going through a very slow recovery.

The country's fuel consumption, which dropped to 6,000 tonnes per day during the shutdown from 14,000 tonnes in usual times, has now increased to 11,000 tonnes, according to data from the Bangladesh Petroleum Corporation.

The export sector witnessed a positive trend in June-July because buyers took shipments of goods against old work orders. Some new export orders are also coming for the next season. However, exports again nosedived by 19% in August, said exporters.

Saiful Islam, president of the Leather Goods and Footwear Manufacturers and Exporters Association of Bangladesh, said their exports in July recorded a jump on the back of the previously-placed work orders. But they saw negative growth in August as the economies of China and other countries have not yet returned to normal.

Recovery still halfway for clothing, footwear, furniture

All the big shopping malls are now open, and showrooms of furniture and jewellery are displaying a colourful look. However, they are experiencing a very thin presence of buyers. After the end of the two-month shutdown, these businesses showed some signs of returning to normalcy in July, but their sales slumped again in August.

Sales of clothing brands, such as DehsiDosh, Western Fashion, Artisan, Cats Eye and Aarong are still down by 50% than usual.

"It will take more time to get back the sales of normal times," said the manager at Western Fashion's Bashundhara Shopping Mall outlet.

Shaheen Ahmed, president at the Association of Fashion Designers of Bangladesh and owner of Anjans, said demand for new clothes has decreased with social events remaining suspended and people not going out much.

Footwear brands are also going through a similar selling condition. They are not getting more than 60-65% of buyers compared to pre-pandemic times. 

Md Shamim Sheikh, branch manager at Apex, a leading footwear brand, at Bashundhara shopping centre, said, "Customer traffic has been perking up to some extent for a week. Our customer flow now stands at 65%."

Sales of furniture have made almost 50% of recovery, like clothing and shoes.

Selim H Rahman, chairman of the Bangladesh Furniture Industries Owners Association, said furniture sales have remained at 50-55% compared to normal times.

"Furniture is a necessity, but people think of buying it after food and clothing. No one is taking rent of a new home. Besides, people do not have money. Hence, buyers are not thronging our showrooms in big numbers."

Restaurants see very few customers

Amjad Hossain, owner of Muslim Kebab House next to Geneva Camp in Mohammadpur, reopened his eatery in mid-May after a three-month coronavirus shutdown.

Clearly on a positive note, his sales jumped 60-70% in July but again fell below 50% in August.

Amjad said, "People do not have money. No one is coming out to eat with their families. In pre-pandemic times, diners used to stay at my restaurant till 11 pm. Now, most tables remain empty. Normally, on Fridays, his sales would amount to Tk40,000-45,000, which now has come down to Tk12,000-15,000."

Although economic activities resumed at the end of the shutdown, not more than 20% of restaurants reopened before July. In August, all restaurants resumed their businesses but no one witnessed the presence of more than 50% of customers compared to the figures in usual times.

Khandaker Ruhul Amin, president of the Bangladesh Restaurant Owners Association, said, "Covid-19 still prevails in the country. People still tend to go home and have food after finishing work. Depending on locations, sales at restaurants recovered more or less by 50%."

Demand for consumer products sees rise and fall

All sectors came to a halt after the shutdown was enforced across the country, but the market for consumer goods was somewhat active.

However, the suspension of all social events, coupled with a decline in people's income, is holding back its fast recovery.

Sales of consumer goods made 70% recovery in June after economic activities resumed, which later reached 90% in July, riding on growing demand ahead of Eid-ul-Adha.

Again, the demand for such products nosedived by 10-15% in August.

Biswajit Saha, director of Meghna Group, the country's largest consumer goods business entity, told The Business Standard, "Sales in August were at least 20% lower than in the same period last year."

Sales of all types of consumer goods increased slightly in July owing to Eid-ul-Adha, but declined again in August with people's income erosion, he added.

He thinks that it is not possible to return to previous sales performance very soon.

Mixed recovery experience for home appliances, motorbikes

Sales of air conditioners in June witnessed at least a10% rise compared to the figure in June last year. Television sales grew at the same rate as well. Refrigerator sales recorded an increase too because of Eid-ul-Adha and hot weather conditions, according to data from a top company.

However, sales of those products decreased in August over the same time a year before. 

Uday Hakim, executive director at Walton, an electronic product giant in the country, told The Business Standard that the sales season for electronic products is between March and July. As there was no sale in April and May, selling pressure was transferred to June.

Sales of motorbikes dropped by 96% in March-May. The sector made a turnaround in June and sales rose by 12% over the same period last year. In July, sales fell slightly and again registered negative growth in August.

Hafizur Rahman, managing director at Runner Automobiles Ltd, said, "Our sales surged in June with the rural economy remaining active and people going for their held-up purchases. But our sales again fell in August."

Good times for mobile phone, computer, laptop businesses

People have turned to online sales as going out of home is not safe in these times of the pandemic. Internet use has become vital with offices and educational institutions opting for meetings and classes online – which are a reason for mobile phone, computer and laptop sellers to feel cheerful.

Sales of computers and laptops grew by about 50% at the retail level, and mobile phones saw a 25% surge in sales in June over the same period last year.

Shahid Ul Munir, president at Bangladesh Computer Samity, said retail sales of computers, laptops, speakers, headphones and other accessories in June were higher than at any time before. The selling growth continued in July and August.

Mohammad Nizam Uddin Jitu, chairman and managing director at Telelink Group and general secretary at the Bangladesh Mobile Phone Businessmen Association, said sales of mobile phones are going through a purple patch as people's dependence on cell phones has increased as they are mostly staying indoors at this pandemic time.

Sales of mobile phones still remain as usual, he added.

Rod, cement on a recovery track

In June, the rod cement sector overcame a miserable phase through positive growth.

According to data, sales of cement and rods rose 11% and 9% respectively in June over the same month last year. In July, sales dropped a bit but again picked up in August.

Masud Khan, an adviser to Crown Cement, told The Business Standard that in July, sales dropped by 3% from the figure in the same period last year due to floods and Eid-ul-Adha. Yet again, the company's sales saw an uptrend in August as work on different suspended projects restarted.

Ali Hosein Akbar Ali, managing director of BSRM, a large steel company in the country, said sales have somewhat returned to normal, but it will take some more days for a complete recovery.

No throng at roadside shops

Md Rafique, a tea stall owner on Rampura Mahanagar Project's road-1, said he would earn Tk6,000-8,000 in pre-pandemic times. But now, his daily sales are no more than Tk2,000.

Aminul, a tee-shirt seller next to Abul Hotel in Rampura, is waiting for his daily sales to return to normal.  His earning has come down to Tk700-1,000 from Tk1,500-2,000 during normal times.

Speaking in a similar vein, Monzur Ahmed, a shoe seller at a roadside shop in Motijheel, said his daily sales have now dropped to Tk2,000-2,500 from Tk5,000-7,000 before the Covid-19 hit.

Poor footfall continues in jewellery shops

When it comes to recovery in sales, jewellers still remain far behind. Their sales are down by 70-75% than usual.

The jewellery sector had come to a standstill during the coronavirus shutdown. Now, people are staying away from buying gold jewellery much with its price having gone up significantly. Moreover, wedding ceremonies are on the lower side too. 

Sujan Rajbangshi, sales executive of Pearl Oasis Jewellers at Bashundhara Shopping Mall, said, "People are back to shopping but not buying jewellery much. Because of high prices, only those who are in need are purchasing gold ornaments but in low quantities. Our sales are still 80% lower than usual."

Enamul Haque Khan, owner of Sharmin Jewellers and president of Bangladesh Jewellers' Association, said, "For more than four months, our sales had been zero. It has now risen to a maximum of 30-35%. However, the high gold price is one of the big reasons behind our poor sales."

Shape of recovery

Such sectors as consumer goods, electronics, construction materials, motorcycles and groceries made a recovery in June-July, but later demand for those products declined.

On the other hand, many sectors, including services, could not bounce back from pandemic shocks. So, this type of recovery cannot be called V-, W-, U- or L-shaped.

A V-shaped recovery involves a sharp rise back to a previous peak after a sharp decline.  In a W-shaped recovery, there is a fast and robust comeback followed by another economic dip. A U-shaped recovery means after a recession, the economy spends a longer time at the bottom before it rebounds straight to its previous peak. 

Another shape of recovery looks like Nike, an American sports fashion brand, logo, which is also called "Nike swoosh". The Nike swoosh shape leads to a rapid fall and gradual improvement.

Experts think Bangladesh's recovery almost looks like a Nike swoosh.

According to Dr Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue, some sectors returned to normal as people went for completing their held-up spending after the shutdown ended.

However, quick recovery in the service sector is no way possible because of a sharp fall in people's income, he added.