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January 12, 2022updated 08 Feb 2022 11:00am

US apparel imports faced rising sourcing costs in November

Increasing demand and supply shortages led to a 10% rise in the unit price of US apparel imports in November.

By Dr Sheng

The November figures from the Office of Textiles and Apparel (OTEXA), revealed a number of trends, including the rise of US apparel imports costs from almost all leading sources as worldwide inflation continued.

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Key trends within the November US apparel imports 2021 data

Trend 1: US apparel imports continue to rebound in November 2021 as companies build the inventory for the holiday season. Thanks to US consumers’ strong demand and the upcoming holidays, the value of US apparel imports went up by 15.7% in November 2021 from a month ago (seasonally adjusted) and increased by as much as 39.7% from 2020. This import surge is unusual, however. Before the pandemic, the value of US apparel imports always peaked in October and then gradually slipped in November and December. The surge of imports in November 2021 could be the combined effects of price inflation and the late arrival of goods due to the shipping crisis.

Meanwhile, US apparel retail sales grew 46% year over year in December 2021. While the demand was encouraging, the fast spread of the new omicron variant and its disruptions in trade and logistics could make it even more challenging for fashion companies to get their needed products in the coming months.

Trend 2: Asian countries continue to play a dominant role in supplying the US market as the production capacity elsewhere is limited, especially for large volume items.

The Asian countries’ market shares fell from 74.2% in 2020 to 71.3% in July 2021, primarily because of the Covid lockdowns in Vietnam and Bangladesh. US apparel imports that came from Asian countries rebounded to 74.8% and 72.5% in October and November 2021, respectively.

However, in November, Asian suppliers’ market shares were somewhat lower than a month ago. The worsening shipping crisis affecting the shipping route from Asia to North America could be among the main reasons.

Sources of US Apparel Imports (by value)

Source of imports 2010 2015 2018 2019 2020 2021 (Jan-Nov) Nov-21
Asia 75.8% 75.9% 74.5% 73.7% 74.2% 72.8% 72.5%
Western Hemisphere 17.6% 16.7% 17.0% 17.0% 16.1% 17.3% 16.7%
Rest of the world 6.7% 7.4% 8.5% 9.2% 9.7% 9.9% 10.8%

Data source: OTEXA (2022)

Trend 3: The debate on China’s role as an apparel supplier would intensify. China stays the largest supplier for the US market in November 2021, accounting for 41.5% of total US apparel imports in quantity and 25.8% in value. However, regarding the outlook of sourcing from China, fashion companies could draw very different conclusions focusing on economic or non-economic factors.

  • Economic factors suggest sourcing from China still makes lots of sense. For example, studies consistently show that China supplied the most variety of products to the US market with no near competitors. In comparison, US apparel imports from Bangladesh, Mexico, and CAFTA-DR (Dominican Republic-Central America Free Trade Agreement) members concentrate more on specific product categories. Also, analysis shows the rising sourcing cost caused by the tariff war overall was manageable to many US fashion companies, especially if they could carefully choose what to source from China and work closely with their Chinese vendors. Further, few competitors could match China regarding flexibility, agility, and speed to market, all of which were critical factors for sourcing amid the pandemic.
  • Non-economic factors suggest sourcing from China will involve growing risks. As the US-China relations become more concerning and confrontational, we could anticipate new trade restrictions targeting Chinese products and products from any sources that contain components made in China. Notably, with strong bipartisan support, President Biden signed into law the Uyghur Forced Labor Prevention Act on 23 December 2021. The new law is a game-changer! Depending on the detailed implementation guideline to be developed by the Customs and Border Protection (CBP), US fashion companies may find it not operationally viable to source many textiles and apparel products from China. In response, China may retaliate against well-known western fashion brands, disrupting their sales expansion in the growing Chinese consumer market. Further, China faces many daunting domestic economic and political challenges, and it insists on strictly implementing the “zero-Covid” policy. A legitimate question for fashion companies to think about is what an unstable China means for their sourcing from the Asia-Pacific region and the contingency plan.

Trend 4: Near sourcing from the Western Hemisphere, especially CAFTA-DR members, continue to gain popularity. Specifically, 17.3% of US apparel imports came from the Western Hemisphere year-to-date (YTD) in 2021 (January-November), higher than 16.1% in 2020. Notably, CAFTA-DR members’ market shares increased to 10.6% in 2021 (January to November) from 9.6% in 2020. The value of US apparel imports from CAFTA-DR also enjoyed a 41.7% growth in 2021 (January—November) from a year ago, one of the highest among all sourcing destinations. The imports from El Salvador (up 42.6%), Honduras (up 47.1%), and Guatemala (36.6%) had grown particularly fast so far in 2021. However, the political instability in some Central American countries could make fashion companies feel hesitant to permanently switch their sourcing orders to the region or make long-term investments.

Percentage of US Apparel Imports from the Western Hemisphere

By quantity
Sourcing destinations 2018 2019 2020 2021

(Jan-Nov)

2020 vs. 2019* 2021 vs. 2020 (Jan-Nov)*
Western Hemisphere 15.6% 15.6% 14.0% 14.3% -1.56 0.61
CAFTA-DR 10.7% 10.7% 9.1% 9.4% -1.53 0.47
USMCA (NAFTA) 3.2% 3.0% 3.1% 3.0% 0.08 -0.12
By value
Sourcing destinations 2018 2019 2020 2021

(Jan-Nov)

2020 vs. 2019* 2021 vs. 2020 (Jan-Nov)*
Western Hemisphere 17.1% 17.1% 16.1% 17.3% -0.99 1.61
CAFTA-DR 10.1% 10.3% 9.6% 10.6% -0.62 1.22
USMCA (NAFTA) 4.8% 4.5% 4.1% 4.1% -0.39 0.07

Data source: OTEXA (2022)

*: Percentage point

Table Unit Price Changes of US Apparel Imports

Periods World China Vietnam Bangladesh India CAFTA-DR USMCA Cambodia
Nov 2021 vs. Jan 2021 13.7% 11.8% 20.5% 11.2% 10.2% 3.7% 21.1% 24.9%
Nov 2021 vs. Nov 2020 11.6% 11.6% 16.3% 12.2% 14.6% 6.4% 9.5% 21.8%
Nov 2020 vs. Nov 2020 -12.9% -20.1% -8.7% -12.8% -16.7% 2.7% -14.4% -5.3%

Data source: OTEXA (2022)

Additionally, the latest trade data suggests US apparel imports continue to become more expansive. Notably, the unit price of US apparel imports from almost all leading sources went up by more than 10% from January 2021 to November 2021, a combined effect of increasing demand and the shortage of supplies. As worldwide inflation continues, the rising sourcing cost pressure won’t ease anytime soon.

Click here to read Dr Sheng Lu’s summary of the US imports data from October 2021. 

Related Companies

Free Report
img

How can brands navigate the post-COVID-19 Apparel market?

In 2021, the Global Apparel market remained at 3% below pre-pandemic levels, with Europe and LATAM lagging behind. If they want to see full recovery, brands must look ahead. GlobalData is therefore offering this free report, Future of the Apparel Market Post Pandemic, to assist companies in adapting to the future market. This report explores the following topics:
  • Latest forecasts for the online apparel market out to 2025
  • How different regions and categories will perform, including which regions are lagging behind and which are performing at pre-pandemic levels
  • Which categories within the Apparel market are displaying resilience
  • Which brands are driving online spending
  • Impact of inflation on the Global Apparel market
  • What the biggest trends are that apparel businesses must adopt to succeed
Read our report on the Future of the Apparel Market Post Pandemic to gain valuable insights on how to best position your brand in a post-COVID-19 world.
by GlobalData
Enter your details here to receive your free Report.

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