Bangladesh recorded a double-digit increase in November

Bangladesh recorded a double-digit increase in November

Early stockpiling by retailers for the Thanksgiving and Christmas holiday seasons, and the bankruptcy of Hanjin Shipping Company, may have contributed to a month-on-month decline in US apparel import volumes in November. Year-on-year, however, imports were up – with Bangladesh recording the largest increase.

The latest figures from the Department of Commerce's Office of Textiles and Apparel (OTEXA) show the volume of US apparel imports from all sources were down 17% month-on-month in November to 2.05bn square metre equivalents (SME), compared with 2.47bn SME booked in October. 

However, the figures also show the volume of apparel imports increased 3.34% year-on-year in November, while in value terms, imports were down 3.3% on November last year to $5.97bn.

In terms of individual supplier countries, seven of the top-ten recorded year-on-year increases, with Bangladesh recording a double-digit hike.

China – the largest supplier of apparel to the US – recorded an increase in shipments of 0.1% year-on-year to 822m SME, but a decline on the 1.14bn recorded a month earlier. The second-largest supplier, Vietnam, booked an increase of 8.2% to 256m SME – lower than October's 17.9% increase.

Bangladesh, ranked number three in the top-ten league table, saw the largest increase of 14.3% to 133m SME. Honduras recorded the second largest increase, of 9.1% to 98m SME, while India saw growth of 8.6% to 77m SME. Cambodia, meanwhile, saw shipments fall 0.7% to 61m SME, slowing its decline of 8.9% in October.

Of the remaining top-ten supplier countries, Indonesia booked a decline of 1.02% to 95m SME, while Mexico saw a year-on-year drop of 0.7% to 70m SME. Meanwhile, imports from El Salvador were up 6.1% to 65m SME, while Pakistan imports grew 3.4% to 44m SME.

Total US apparel and textile imports in November were down 9.5% from October, dropping to 5.14bn SME from 5.68bn SME month-on-month. This follows an increase of 3.5% last month. Textile shipments into the US were up 10% to 3.10bn SME year-on-year.

Apparel volumes - 12-month overview

Interactive chart - click on country to add/remove

Year-to-date and five-year overview

While monthly trade data is often volatile, with big swings from one month to the next, a broader view of the year so far shows total US apparel and textile imports declined 1.2% in the 11 months from January to November to reach 58.10bn SME, from 58.83bn SME last year. Within this, textiles dropped 1.4% to 33.16bn SME, while apparel shipments slipped 1.03% to 24.94bn SME.

In value terms, total US apparel and textile imports this year so far are down 6.3% to $97.23bn, from $103.78bn in the same period a year ago. Apparel imports fell 5.1% to $74.96bn, while textiles dropped 10.3% to $22.26bn.

Only four of the top ten apparel supplier countries booked growth during the first 11 months, with Vietnam seeing the largest increase at 6.7% to 3.09bn SME. India booked the second highest gain, at 1.96% to 971m SME. Meanwhile, El Salvador and Indonesia also booked gains, with growth of 1.8% to 760m SME, and 0.5% to 1.18bn SME, respectively. Imports from China, meanwhile, have slipped 2% to 10.37bn SME, while Bangladesh booked a drop of 0.2% to 1.72bn SME.

Cambodia saw the largest decline at 13% to 846m SME, while Pakistan's shipments to the US fell 9.7% to 442m SME.

Taking a broader look at the data over a five-year period from 2010 to 2015, Vietnam is the only country in the top ten to have seen a steady increase in import volumes to the US, growing from 1.91bn SME in 2010 to 3.14bn SME in 2015, increasing its share of total imports from 7.72% to 10.73%. China's imports have fluctuated over this period, from 10.4bn SME in 2010, falling to 9.74bn SME a year later, before reaching a peak of 11.4bn SME in 2015. The country has increased its share slightly, from 41.98% in 2010 to 42.03% last year. 

Pakistan, meanwhile, is the only country in the top ten to be exporting less to the US than it was five years ago, falling from 698m SME to 591m SME in 2015, decreasing its share of the total from 2.82% in 2010 to 2.29% last year.

Apparel volumes - 5-year overview

Interactive chart - click on country to add/remove

Facts behind the figures

Despite factory safety concerns, Bangladesh's clothing industry has largely continued to build momentum as a low-cost sourcing destination. Since the collapse of the Rana Plaza building in April 2013, two major industry-backed remedial plans, together with one supported by the government, have worked to resolve issues over safety and worker rights, including the closure of some garment factories.

Two fatal terrorist attacks in Dhaka, and a recent safety warning by the US State Department, have left garment buyers rethinking travel plans and reignited concerns over a potential economic fallout for a sector reliant on foreign investment. But while industry observers have questioned whether the attacks mark a tipping point for Bangladesh, garment exporters insist that business continues as usual in the country – a view that appears consistent with the country's apparel export trend.

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While there continue to be concerns that increasing wages are undermining the competitiveness of China's garment production on the world stage, the latest figures confirm it still remains the largest source for apparel buyers as rising prices are largely being offset by productivity gains. No other country can match China in terms of the size of its supply base, its range of skills, its quality levels, its product variety and the completeness of its supply chain. The country also continues to lead the way when it comes to efficiency and infrastructure.

A Fashion Industry Benchmarking Study published by the United States Fashion Industry Association (USFIA) in June found that China's position as the number one sourcing destination seems unlikely to change anytime soon. According to the latest Caixin China manufacturing purchasing managers' index (PMI), rising domestic demand helped manufacturing activity in China to expand at its fastest rate in almost four years in December, although rising input costs underline sustained inflationary pressure.

China's manufacturers are also continuing to invest overseas. Suzhou Tianyuan Garments Co, a garment producer for brands including Adidas and Reebok, announced plans recently to set up a new US$20m factory in North America. And Shangying Global entered the US marketplace in October last year with its first international acquisition, purchasing global apparel manufacturer, designer, and merchandiser Oneworld Star International (OSI) in a deal worth $280m.

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Vietnam, meanwhile, has benefited as producers and buyers diversify their supply chains, helped by its low labour costs and its industry focus on specialisation, modernisation, and increasing value added.

Manufacturers in Vietnam stand to gain from improved access to the EU import market once the EU-Vietnam free trade agreement comes into force, and the country has benefited from the foreign direct investment that has flowed into the country as a result of the anticipated Trans-Pacific Partnership (TPP) trade agreement. But with US president-elect Donald Trump having promised to sign an executive order pulling out of the 12-nation trade deal, the country will now be assessing the impact of losing a huge anticipated garment export boost under the deal.

Vietnam's apparel exports in 2016 are expected to hit targets of $29bn, although manufacturers are being urged to look at ways to offset competition and rising costs if this figure is to be surpassed next year. The export value is higher than the $27.5bn achieved in 2015, but is lower than an initial export target of $31m. There are calls for the government to create a development strategy to 2025, with a vision towards 2040, in order to help firms take advantage of opportunities likely to be brought by free trade agreements.

While Vietnam's textile and garment exports continued to grow in the first eight months of 2016, it was at a slower pace than the year before due to production delays and falling demand in global markets, recent figures show. The Vietnam Cotton and Spinning Association (VCOSA) puts the drop in export orders down to having to compete "fiercely" with garment producing countries in the region, particularly Cambodia and Myanmar, which enjoy tax incentives when exporting to the EU, as well as competition from China, India, Bangladesh and Sri Lanka. 

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Cambodia's apparel industry is the country's largest manufacturing sector, despite being blighted by strikes, wage disputes, and factory faintings. Garment manufacturers have called for a focus on productivity to offset rising wages, and are also urging buyers to increase their prices for Cambodian goods. A new monthly minimum wage of $153 took effect this month.

But while Cambodia's garment sector appears to be doing fine, boosting the country's GDP to a predicted 7.2% for 2016, recent data shows the country is not competitive enough. Garment exports are only growing in markets with beneficial access, like Canada, Japan and the EU, with shipments to the US having fallen for the past five years.

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