China booked the largest growth in February

China booked the largest growth in February

February is historically the slowest month when it comes to US apparel imports, and this year was no exception – with a lull as retailers prepared to replenish stocks for the spring season and factories in Asia shut down for the Lunar New Year. 

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 dropped 6.1% month-on-month in February to 2.28bn square metre equivalents (SME). The figures, however, show a 9.2% increase in volume against February last year, and 6.9% growth in value terms year-on-year to $6.54bn.

In terms of individual supplier countries, six of the top-ten recorded a year-on-year increase in February, with China booking the largest growth.

China – the largest supplier of apparel to the US – saw shipments jump 18.1% year-on-year during the month to 927.2m SME. Imports from the country, however, were down month-on-month from the 1bn SME recorded in January. The second-largest supplier, Vietnam, booked year-on-year growth of 13% to 315.1m SME – an improvement on January's growth of 0.9%.

Textile and apparel imports, meanwhile, grew 12.4% year-on-year to 5.29bn SME, and in value terms by 10.8% to $8.65bn. Textiles alone, meanwhile, recorded growth of 15% to 3bn SME, and in value terms growth of 24.7% to $2.11bn.

Bangladesh, ranked number three in the top-ten US apparel supplier league table, saw its exports edge up 0.4% year-on-year in February to 167.2m SME, while Cambodia's shipments soared 19.7% year-on-year to 89.8m SME. Nicaragua's exports were up 6% to 48.8m SME.

Of the remaining top-ten supplier countries, Mexico reported growth of 4.8% to 73.1m SME, while Honduras recorded the largest year-on-year decline of 7.9% to 78.1m SME. El Salvador saw a decline of 5% to 59.2 SME, India a decline of 3.2% to 93.2m, and Indonesia a decline of 2.1% to 110.5m.

Apparel volumes - 12-month overview

FebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecemberJanuaryFebruary
China78554473182495011401299127611158557941003927
Vietnam279271288297296335327295333271261352315
Bangladesh167169136151165166154153142142131189167
Indonesia1131161081009810498961138379113110
Honduras85998396939399877995626678
India9611296968894847793746510493
Cambodia757769575985891079169729890
Mexico70756676787371677270606373
El Salvador62765769637272606471644959
Nicaragua46494446464551444543.5354549

Source: The Department of Commerce's Office of Textiles and Apparel (OTEXA)

Year-to-date and eight-year overview

In value terms, total US apparel and textile imports were up 7.3% to $17.94bn in the year-to-date, from $16.73bn in the same period a year ago. Apparel imports grew 3.7% to $13.59bn, while textiles were up 20.1% to $4.35bn.

All but two of the top ten apparel supplier countries booked growth during the first two months of the year, with Cambodia seeing the largest increase at 19.9% to 188m SME.

Nicaragua booked the second highest gain, at 10.3% to 94m SME. Imports from China, meanwhile, were up 4.2% to 1.93bn SME – with the country remaining by far the biggest supplier of apparel to the US with a 42% share of the market. Bangladesh, the third-largest supplier with a share of 6.9%, booked growth of 3.5% compared with last year to 356m SME. Vietnam meanwhile, reported a 6.3% increase year-on-year to 1.93bn SME.

Taking a broader look at the data over an eight year period from 2010 to 2017, Vietnam is the only country in the top ten to have seen a steady increase in import volumes to the US, growing from 1.91bn SME in 2010 to 3.60bn SME in 2017 – growing its share of total imports from 7.72% to 13.28%.

China's imports have fluctuated over this period, from 10.4bn SME in 2010, falling to 9.74bn SME a year later, before reaching a peak of 11.38bn SME in 2015. Shipments dipped again in 2016 to 11.17bn SME, and last year grew to 11.36bn. The country has lost marginal US apparel market share, from 41.98% in 2010 to 41.91% in 2017.

Cambodia, Indonesia, Mexico, El Salvador and Pakistan are all exporting less to the US now than they were eight years ago. Cambodia fell from 947.1m SME to 931m SME in 2017, decreasing its share of the total from 3.83% in 2010 to 3.43% last year.

Apparel volumes - 8-year overview

20102011201220132014201520162017
China10387.059738.179881.910369.8710780.0611385.741117511365
Vietnam1910.5041998.3792145.0412430.3552751.0833135.55533523602
Bangladesh1606.0741539.5271521.9161692.4471609.7051869.94318621854
Indonesia1261.8231307.3971262.6631261.8021246.3911264.02812681229
Honduras1271.91182.7911118.7051073.3221084.7821114.3710811065
India971.113899.513834.972885.229956.6971023.54510441032
Cambodia947.1081037.3661039.1621065.0491020.7081051.484903931
Mexico952.327946.174897.016908.5916.85898.399880839
El Salvador819.839782.192789.751796.812788.692813.004825780
Pakistan697.933625.846581.654584.016586.273590.969535533

Source: The Department of Commerce's Office of Textiles and Apparel (OTEXA)

Facts behind the figures

While there continues to be concern that increasing wages are undermining the competitiveness of China's garment production on the world stage, the latest figures continue to confirm its appeal to apparel buyers, particularly in the US.

The latest data shows the average unit price of China's apparel exports into the States has dropped steadily over the last seven years – with a decline of 4.8% in the last year alone. And China's share of US apparel import volumes currently stands at 41.9%, little changed from the 41.53% it held in 2016, and marginally lower than the share of 41.98% it held in 2010.

No other 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. The country also continues to lead the way when it comes to efficiency and infrastructure.

Work has been underway by China's government to crack down on pollution, with tens of thousands of factories, including garment and textile facilities, shut down already. The national effort follows several months of investigations by the country's Environment Bureau to determine which factories are not following environmental laws. An estimated 40% of all China's factories have been closed in order to lower air pollution levels.

Factories may also feel further pressure to conform following the recent launch of an online supply chain map of China linking fashion brands and retailers to their suppliers' environmental performance. The database and map provide real-time data and historical trends on air pollution emissions and wastewater discharge for nearly 15,000 major industrial facilities in China, as well as access to environmental supervision records for over half a million more.

Earlier this year an initiative was agreed to boost responsible business conduct and due diligence in the country's textile and apparel supply chains.

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Meanwhile, 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 focus on productivity to offset rising wages, and are also urging buyers to increase their prices for Cambodian goods. A new monthly minimum wage of $170 took effect in January – an increase of 11% on last year.

Cambodia's garment exports are growing in markets with beneficial access, like Canada, Japan and the EU, while shipments to the US have fallen over the past eight years. 

However, in December the European Parliament passed a resolution calling for the temporary suspension of Cambodia's preferential Everything But Arms (EBA) duty-free trade access over claims the country is violating its obligations under the agreement. Earlier in the month, a ruling by the country's top court to dissolve Cambodia's main opposition party had prompted garment makers to call for continued support from international buyers.

Cambodia's Government is facing pressure to adjust its labour laws. A number of groups representing major US and European international brands and retailers last month wrote an open letter to the country's premier urging action to improve worker and labour rights.

The European Union (EU) is the most important market for Cambodia's garment exports, accounting for around 45% of the total – which grew 5.4% year-on-year to US$3.3bn in the first six months of 2017. As a whole, Cambodia's garment and footwear sector is worth US$6.8bn and accounts for 80% of its total exports.

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