Blog: Michelle RussellSeeking alternatives to rising labour costs

Michelle Russell | 1 December 2014

Instead of relocating production in an attempt to sidestep the challenge of rising labour costs, China's textile and clothing manufacturers should work to create a more sustainable industry, executives were told earlier this month. The ‘Integral Conversation' conference staged by clothing giant Esquel Group heard that while improving environmental performance means increasing costs, it will also help to boost international sales.

With this in mind, a new report published by Boston Consulting Group also suggests apparel businesses need to end the race from one low-cost supplier country to another and rethink their entire sourcing philosophy in the future.

The report points out that cheap labour is becoming a rare commodity, and the number of low-cost countries is dwindling. It argues that companies would be better served by assessing existing facilities to generate efficiency gains, improving speed to market and taking pressure off labour cost management.

When it comes to the current state of play in US textile, apparel and footwear imports and exports, the International Trade Commission's annual report on 'Shifts in US Merchandise Trade 2013' provides a snapshot of overall trends.

With imports supplying most US consumer demand for textiles and apparel, and footwear, it is perhaps not surprising the US trade deficit in both sectors rose last year. The largest regional supplier was Asia, with China remaining the top supply country.

In Bangladesh, an agreement was last week outlined to deliver compensation to the victims of the Tazreen Fashions fire - two years after the blaze killed at least 112 people and injured 300 others. The pact provides the principles for a compensation process, and will be based on the platform developed for victims of the Rana Plaza factory collapse, which killed more than 1,100 people.

In the US the build-up to the key holiday season got underway with retailers ramping up their promotions for the Black Friday/Thanksgiving weekend. But while first signs suggest the weekend turned out to be disappointing in the US, the date is turning into a major shopping event in the UK.

And finally, just-style took a closer look at the slow fashion movement, one decidedly at odds with fast fashion by offering an alternative to mass-produced clothing. While some believe more work is required if the message is to really take off, others see it as an ideal opportunity for middle market players.


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