China saw shipment volumes rise 11.16% year-on-year in October to 1.03bn MM2

China saw shipment volumes rise 11.16% year-on-year in October to 1.03bn MM2

The volume of US apparel imports continued its upward trajectory in October, both on a monthly and year-on-year basis, as retailers continued to recover from the pandemic lockdown and began to stock up for the holiday season. While shipment volumes from China were down on those a month earlier, the sourcing powerhouse saw exports to the US increase on a year-on-year basis for the first time in 14 months.

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 were up 2.4% month-on-month in October to 2.52bn million square meters (MM2). This compares to 2.46bn MM2 the month before and comes amid a year-on-year rise in shipment volume but a decline in value. 

The figures for October show a 5.17% increase in volume against the same month last year and a 6.9% drop in value to $6.93bn. In terms of individual supplier countries, six of the top-ten saw their exports to the US increase on a year-on-year basis, with the largest coming from Pakistan at 27.38% to 68m MM2.

China, by far the largest supplier of textiles and apparel to the US, booked the fourth-largest year-on-year gain in shipment volumes at 11.16% to 1.03bn MM2. The increase marks China's first monthly year-on-year increase since August of last year. Volumes were, however, down from 1.04bn MM2 last month. 

The second-largest supplier, Vietnam, saw shipments edge up by 0.41% year-on-year to 359m MM2. This compares to a 4.8% increase last month to 362m MM2.

Of the remaining top-ten, Bangladesh, the third-largest supplier of clothing to the US, recorded the second-highest gain at 17.23% to 196m MM2. Cambodia was close behind in terms of year-on-year increases, with a 16.06% rise in shipment volumes to 119m MM2. 

India was the only other country to record a rise at 8.99% to 97m MM2.

The largest decline was from El Salvador, where volumes were down 12.92% to 56m MM2. Indonesia saw shipments fall 11.31% to 93m MM2, and Mexico by 4.83% to 60m MM2. Honduras recorded the smallest decline at 2.73% to 81m MM2. 

Combined textile and apparel imports from all sources in October, meanwhile, were up 19.55% year-on-year to 7.46bn MM2, and in value terms dropped 2.1% to $9.65bn. Textiles alone recorded import growth of 28.49% to 4.94bn MM2, and in value terms were up 12.6% to $2.73bn.

All but one of the top-ten suppliers of textiles and apparel to the US saw shipment volumes improve on the year prior, with Indonesia recording the only decline. Turkey recorded the largest increase at 43.59% to 42 MM2, while China's was up 26.71% to 3.8bn MM2.

Apparel volumes - 12-month overview

OctoberNovemberDecemberJanuaryFebruaryMarchAprilMayJuneJulyAugustSeptemberOctober
China926679678827580274340393650853104010401028
Vietnam357253293393335325245162267393348362359
Bangladesh1681411472191901941456183152197161196
Indonesia1056774106959978455072817293
Honduras8485895881705103164827881
India90736910511110666202862827997
Cambodia10373741039592644660122108137119
Mexico64585257646325416667666060
El Salvador64516042565546948475956
Pakistan54535259505547204050555968

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

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 the value of total US apparel and textile imports dropped 22.15% to $74.45bn year-to-date, from $95.64bn in the same period a year ago.

Drilling down, apparel imports fell 25.56% to $53.96bn in the ten months from January to October, while textiles slipped 11.47% to $20.49bn.

Only Cambodia saw apparel shipment volumes grow at 3.65% to 84m MM2. China booked the biggest fall at 42.33% to 12.8bn MM2.

Facts behind the figures

The Covid-19 pandemic has caused massive disruption to global supply chains. China, the world's largest producer of apparel and footwear and raw material inputs, was hit by factory closures in the early part of the year, which inevitably had a knock-on effect at garment suppliers in other major sourcing countries. But as the virus then spread across the globe, the next and biggest hit came when US demand slumped as retailers closed shops and cancelled or postponed orders.

For decades, China has been the go-to destination for high-quality, low-cost manufacturing, and has established itself as a key source of supply for almost all major industries.

However, the annual '2020 Fashion Industry Benchmarking Study' published by the United States Fashion Industry Association (USFIA) in August notes Covid-19 and the US-China trade war are pushing more US fashion companies to reduce their China exposure. While 'China plus Vietnam plus Many' remains the most popular sourcing model among respondents, around 29% indicate they are sourcing more from Vietnam than from China in 2020, up further from 25% in 2019.

Indeed, Vietnam and Bangladesh are expected to play a more significant role as primary apparel suppliers for the US market – figures that are borne out by the latest OTEXA numbers.

On a year-on-year basis, imports from most Asian markets including Vietnam, Bangladesh, Cambodia, India, and Pakistan rose. Pakistan, in particular, has reported the largest year-on-year gain in apparel shipment volumes for the last two months. It was also among the three countries which posted an increase in August.

In 2019, approximately one-third of world apparel exports came from Asian countries other than China, a record high since the 22.5% share recorded in 2009. One of the things that benefit Asian suppliers is their ability to vertically integrate supply chains because they are the leaders in apparel production. 

But while clothing exports from Bangladesh and Vietnam, have grown, it is certainly not enough to suggest they will be the next China. 

A recent study by the International Labour Organization (ILO) questioned 16 industry experts on how the pandemic will affect garment production systems and practices in Asia. While there remains little doubt among participating experts that Asia will remain the pre-eminent global production hub post-Covid-19, they say shifts could occur between countries as buyers adjust their sourcing strategies with risk becoming an increasingly important factor.

While nearshoring and onshoring have grown in importance for some buyers in recent years, study participants largely agreed the pandemic may not change ongoing trends in this regard.

Meanwhile, manufacturing activity in China continues to surge, reaching a decade high in November as the country continues to recover from the Covid-19 pandemic. But rising demand is also contributing to an uptick in input costs and output charges.