Vietnam is one of the "absolute winners" in terms of US apparel imports

Vietnam is one of the "absolute winners" in terms of US apparel imports

US garment imports have not only reached record levels but, based on recent data, growth is accelerating. David Birnbaum has used this as an opportunity to take a snapshot of the global garment industry: the current position of exporting countries and more importantly the direction in which they are moving. This article, the first of three, looks at the success stories.

Based on recent data, US garment import growth is accelerating. 

Total U.S. Garment Imports: YTD 08-2015 Compared with YTD 08-2014
Item Description Units Value
2014 2015 % +/- 2014 2015 % +/-
Total U.S. Garment Imports: 16,867,141 18,055,661 7.00% 538,953 565,918 5.00%

As we can see from the chart below, real growth began in May 2015:

U.S. Imports All Garments Monthly Data 2015 vs 2014
Units Value
January -4.20% -4.60%
February 0.20% -0.50%
Mar 24.50% 18.50%
Apr 1.10% 0.10%
May 6.80% 4.40%
June 7.70% 8.00%
July 7.10% 5.10%
Aug 13.50% 8.90%

In a period of growth when increasing demand begins to impact on total capacity, we can differentiate between the more successful exporting countries both from their less successful and unsuccessful counterparts.

We can divide exporters into three groups:

1: Successful exporting countries that are characterised by increasing market share. These are the true winners, where customers are shifting orders from other exporting countries.

2: Less successful exporting countries that are characterised by increasing exports but decreasing market share. These are the countries that are seemingly doing well, but are losing their share of increased demand.

3: Unsuccessful exporting countries that are characterised by decreasing exports and decreasing market share. These are the countries that, despite increasing demand, are losing orders.

At the same time, by looking at data on a month-to-month basis we can see how sourcing has shifted as overall demand rises, and estimate the future direction of garment sourcing.

The success stories  

Of the major exporting countries there are five winners, of which three are absolute winners and two are apparent winners.

Absolute winners

  • VIETNAM: Exports by units up 15.9% and 15.8% by value.
Vietnam YTD 15-08 Vietnam YTD 15-08 Vietnam YTD 15-08
Units (1,000 Dozens) Value ($ Millions) FOB
2014 2015 %+/- 2014 2015 %+/- 2014 2015 %+/-
Total 1,813 2,101 15.90% Total 6,083 7,041 15.80% Total $3.36 $3.35 -0.10%

Market share by value as of year-to-date August 2015 stood at 15.3% compared with 14.8% for the same period in 2014: an increase of 10.2%. At the same time, the market has risen every month for the past three years, with the exception of February 2015 when goods were caught up in the West Coast ports strike.

  • SRI LANKA: Exports by units up 18.0% and 17.1% by value.
Sri Lanka YTD 15-08 Sri Lanka YTD 15-08 Sri Lanka YTD 15-08
Units (1,000 Dozens) Value ($ Millions) FOB
2014 2015 %+/- 2014 2015 %+/- 2014 2015 %+/-
Total 273 322 18.00% Total 1,167 1,367 17.10% Total $4.28 $4.25 -0.70%

Market share by value as of YTD August 2015 stood at 2.4% compared with 2.2% for the same period in 2014: an increase of 11.6%. At the same time, the market has risen almost every month for the past three years.

  • JORDAN: Exports by units up 5.4% and 11.3% by value.
Jordan YTD 15-08 Jordan YTD 15-08 Jordan YTD 15-08
Units (1,000 Dozens) Value ($ Millions) FOB
2014 2015 %+/- 2014 2015 %+/- 2014 2015 %+/-
Total 143 151 5.40% Total 744 828 11.30% Total $5.20 $5.49 5.60%

Market share by value as of YTD August 2015 stood at 1.5% compared with 1.4% for the same period in 2014: an increase of 6.0%. At the same time, the market has risen almost every month for the past three years.

Apparent Winners

  • BANGLADESH: Exports by units up 11.1% and 7.3% by value.
Bangladesh YTD 15-08 Bangladesh YTD 15-08 Bangladesh YTD 15-08
Units (1,000 Dozens) Value ($ Millions) FOB
2014 2015 %+/- 2014 2015 %+/- 2014 2015 %+/-
Total 1,150 1,277 11.10% Total 3,434 3,683 7.30% Total $2.99 $2.88 -3.50%

Market share by value as of YTD August 2015 stood at 6.5% compared with 6.4% for the same period in 2014, an increase of 2.2%. However, market share has fallen in both July and August. At the same time, market share increases occurred only in December 2014, February, April and June 2015. This is very spotty recovery and may not be sustainable.

  • INDIA: Exports by units up 6.8% and 9.1% by value
India YTD 15-08 India YTD 15-08 India YTD 15-08
Units (1,000 Dozens) Value ($ Millions) FOB
2014 2015 %+/- 2014 2015 %+/- 2014 2015 %+/-
Total 678 725 6.80% Total 2,396 2,613 9.10% Total $3.53 $3.61 2.10%

Market share by value as of YTD August 2015 stood at 4.6% compared with 4.4% for the same period in 2014: an increase of 3.9%. Market share peaked in April and has been moderating ever since, to the point when August shows an actual decline. One month does not make a trend, but the recent figures should be a matter of concern.

Conclusion

As long as US imports continue to grow, conditions will appear to be favourable.

Successful garment exporting countries will show go from strength to even greater strength. The truth will come home when US garment imports stabilise or go into even a moderate decline. At that point this group will do even better.

Click on the links below for Birnbaum's take on what the future holds for: