Bangladesh led US import growth in September

Bangladesh led US import growth in September

Apparel imports into the US continued on their upward trajectory in September, with seven of the top ten supplier countries booking year-on-year growth. Bangladesh led the pack, posting a solid double-digit gain, with strong increases also recorded by Indonesia, Vietnam, and Pakistan.

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 grew 4.8% year-on-year in September, down from the 13.5% increase in August. Imports reached 2.69bn square metre equivalents (SME), up from 2.56bn SME in September last year.

Breaking it down into individual supplier countries, seven of the top ten recorded growth. Shipments from China – the largest supplier of apparel to the US – were up 1.48% to 1.32bn SME. Nearest rival Vietnam grew 10.6% to 281m SME, compared to the same month a year ago.

And Bangladesh, ranked number three in the top-ten league table, saw apparel shipments rise 41.6% to 157m SME.

Of the remaining supplier countries, Indonesia recorded the strongest growth at 16% to reach 99m SME, followed by El Salvador (up 13.8% to 76m SME) and Pakistan (up 13% to 51m SME). Year-on-year import gains were also reported by India (up 10.5% to 74m SME).

However, three countries saw saw apparel shipments decline during September. Cambodia recorded the largest drop at 3.52% to 109m SME, followed by Honduras (down 3.5% to 101m SME), and Mexico (1.74% to 72 SME).

Facts behind the figures

While there are concerns that increasing wages are undermining the competitiveness of China’s garment production on the world stage, the country continues to lead the way when it comes to efficiency and infrastructure.

China remains a compelling source for apparel buyers as rising prices are largely being offset by productivity gains. With its 10,916 garment manufacturers with annual sales above CNY20m churning out 29.6bn pieces in 2014, up 1.6% year-on-year, no 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.

However, the falling value of the Chinese yuan is being seen as a lever for US brands and retailers to drive down product costs, with one analyst describing it as a “tailwind for those sourcing apparel from China”. The flipside for retailers and brands shipping in goods to sell in China is to take a hit on margin or increase the price of their products.

Data released this week also shows the overall weakening of China's manufacturing industry has slowed down, prompting hopes the government's stimulation efforts are starting to take effect.

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.

Foreign direct investment continues to flow into the country, and the conclusion of negotiations on the Trans-Pacific Partnership (TPP) trade agreement last month means Vietnam may benefit significantly. Luen Thai Holdings is the latest company to boost its business in Vietnam, announcing in August it will continue to devote resources and efforts in its Vietnam projects.

Bangladesh's clothing industry continues to build on its momentum as a low-cost sourcing destination, despite factory safety issues. 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. The country is now working to achieve its goal of doubling exports to $50bn by 2021, but will need to address a number of challenges first, its garment manufacturing association has said. 

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 renewed focus on productivity in the sector ahead of a 9.4% rise in the minimum wage for clothing workers to US$140 per month agreed for the beginning of next year. They are also urging buyers to increase their prices for Cambodian goods.

In September, construction of a specialised training institute for the country's garment workers got underway in Phnom Penh. It will train local workers to fill middle management positions in factories across the country, and offer vocational training programmes such as specialised design and pattern making courses, with the costs paid by employers.

Year-to-date

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 increased 8.92% between January and September to reach 48.43bn SME from 44.46bn SME last year. Within this, textiles grew 10.6% to 27.69bn SME, while apparel shipments were up 6.76% to 20.74bn SME.

All but two of the top-ten apparel supplier countries booked growth. Movement within the top three during the seven months shows China rose 7.2% to 8.69bn SME, Vietnam grew 15.2% to 2.38bn SME, and Bangladesh increased 13.8% to 1.43bn SME.

The other winners included India (up 7.2% to 799m SME); Cambodia (up 4.2% to 816m SME); Honduras (up 3.8% to 837m SME); El Salvador (up 2.2% to 609m SME); and Pakistan up 0.4% to 448m SME.

Mexico, however, saw apparel shipments drop 0.6% to 692m SME, while Indonesia's shipments were down 0.5% to 960m SME.