Viewpoint: US apparel industry data sheds light on sector shifts
An annual update of US apparel industry trends might use data that is more than a year old, but it offers an interesting snapshot of the state of play in the US textile and apparel trade, from domestic production trends to import costs.
On average, every man, woman, and child in the United States spent around $898 to purchase 62 garments in 2012, according to the newly-released ApparelStats report from the American Apparel & Footwear Association (AAFA).
That said, total consumption slipped by 0.1% to 19.37bn garments during the year, although values rose 4.8% to $282.2bn at retail.
And as a percentage of total Personal Consumption Expenditures (PCE), apparel accounts for just 2.5% of the total, compared with 3.5% in 1999.
Retail prices rose for a second straight year in 2012, with an increase of 3.4% attributed to combination of factors - including higher material, transportation and labour costs throughout the supply chain, along with a return to higher price-points as consumer confidence increased.
The movement was led by rises in prices for infants' and toddlers' apparel (5.4%), followed by men's and boys' apparel (4.2%), and women's and girls' apparel (3.5%).
As far as the source of these garments is concerned, 2.5% were produced domestically - while 97.5% were imported, falling from the all-time high of 98.0% in 2010.
Delve deeper into the data, and the number of garments made in the US rose by 8.5% in 2012 - marking a gain of 37.7m garments year-on-year to 483.6m in 2012. But it's a drop in the ocean compared with the total 18.95m garments imported during the year.
Estimates of the number of people employed in apparel manufacturing in the US during the year also tell a sobering tale, falling 2.4% between 2011 and 2012 to 148,100. This marks a drop of 72.6% since 1998.
The contraction in apparel manufacturing employment, despite increases in apparel production, can be partially attributed to a continuation of the productivity gains (in output per worker) experienced by the industry in recent years, the report says.
Apparel import trends
Obviously the vast majority of apparel products sold in the US are still made overseas.
The US imported 23.68bn square metre equivalents (SME) of apparel in 2012, slipping 0.8% on the year before. The dip largely due to declines in imports from six of the top ten apparel suppliers.
China remained the number one apparel supplier in 2012 (a ranking it has held since 2002) with a market share by volume of 41.7% - a level comparable to the previous three years.
Although apparel imports from China grew by 1.5% in 2012, apparel imports from Vietnam grew at a much stronger rate of 7.3%, suggesting that Vietnam remains the country that many apparel executives are looking to as they seek to lessen their dependence on China.
Vietnam remains the second largest supplier of apparel to the U.S. market, a position it has claimed since 2008.
Other top apparel suppliers to the US included Bangladesh (3), Indonesia (4), Honduras (5), Cambodia (6), Mexico (7), India (8), El Salvador (9) and Pakistan (10).
Although the rankings within this group have changed in recent years, the make-up of the top-10 has remained the same. Between them, they accounted for just over 84.7% of total US apparel imports - up from 66% in 2005.
Trade programmes sidestepped
Just 20.6% of all apparel imports entered under free trade agreements and preference programmes.
According to the report, apparel executives have reported a combination of complicated rules of origin, burdensome documentation procedures, and uncertainties around expiring preference programmes as underlying reasons for this trend.
However, some programmes did experience growth in 2012, thanks largely to flexible rules. Apparel imports from Jordan, for example, grew more than 14% in 2012. And a newly liberalised preference programme with Haiti helped that country chalk up a 5% gain in 2012.
The low utilisation of FTAs and preference programmes also meant that the average duty paid on US apparel imports continued to rise in 2012, growing to 13.26% - the highest since before 2000. In comparison, the average overall duty rate assessed on all imports (including apparel) in 2012 was just 1.32%.
Despite growing cost pressures throughout the supply chain, average apparel import prices dipped 0.3% in 2012 to $3.24, from a year earlier.
Average unit price drops in China (-2.6% to $2.94) and Vietnam (-0.4% to $3.31) were almost entirely offset by price increases by the next three largest suppliers: Bangladesh (+0.3% to $2.94), Indonesia (+1.2% to $3.91), and Honduras (+3.5% to $2.29).
Other interesting numbers to emerge are year-on-year drops in unit prices from Cambodia (-2.4% to $2.44), India (-1.2% to $3.64) and Pakistan (-4.4% to $2.53).
US apparel, textile and cotton exports
When it comes to exports of US apparel, textile products and fabric, all saw gains in 2012, continuing the upward trend experienced in 2011.
US apparel exports grew more than 7.6% fuelled by double-digit increases to Canada, Japan and the UK - the top three markets for finished apparel.
Fabric exports grew 3% on the back of gains to Mexico, El Salvador and Japan, and textile mill exports grew more than 5%.
But US cotton and yarn exports declined. Yarn shipments dropped nearly 10% in 2012, pulled down by double-digit declines to Honduras - although yarn exports to China continued their expansion, rising by 2.44% in value terms year-on-year.
Likewise, US cotton exports plummeted in 2012, dropping by more than 26% - although much of that decline was offset by a 30.8% hike in sales to China. China consumes more than half of all US cotton exports.
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