US apparel imports surged in July on back-to-school orders

US apparel imports surged in July on back-to-school orders

The volume of US apparel imports saw a double-digit increase month-on-month in July as retailers stocked up for the back-to-school season – but were marginally lower than the same time last year. The biggest gains were booked by Vietnam, Cambodia and India, but shipments from Bangladesh slipped again.

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 was up 13.3% month-on-month in July to 2.55bn square metre equivalents (SME), compared with 2.25bn SME booked in June.

The figures also show the volume of apparel imports fell 0.08% against July last year, and were down 2.1% to $7.73bn in value.

In terms of individual supplier countries, only four of the top-ten recorded a year-on-year increase while three countries – Indonesia, Honduras and El Salvador – saw double-digit declines.

China – the largest supplier of apparel to the US – saw shipments drop 2.5% year-on-year to 1.14bn SME. Shipments, however, were up month-on-month from the 950m SME recorded in June. The second-largest supplier, Vietnam, booked an increase of 13.5% to 335m SME – this was higher than June's 5.3% growth.

Bangladesh, ranked number three in the top-ten league table, saw its exports to the US decline 0.3% year-on-year in July to 166m SME, continuing last month's decline. Cambodia saw shipments jump 21.1% year-on-year to 85m SME, while India's increased 14.8% to 94m SME.

Of the remaining top-ten supplier countries, El Salvador reported the largest year-on-year decrease of 13.2% to 72m SME, while Honduras recorded a fall of 12.9% to 93m SME. Indonesia shipments, meanwhile, were down 10.4% to 104m SME. Mexico booked a year-on-year increase of 6.2% to 73m SME, while Nicaragua's shipments declined 1.1% to 45m SME.

Total US apparel and textile imports in July were up 2%, reaching 5.82bn SME from 5.71bn SME in the same month last year. Textile shipments into the US were also up, rising 3.8% to reach 3.27bn SME.

Apparel volumes - 12-month overview

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

Click on the individual countries to add or remove  

Year-to-date and six-year overview

While monthly trade data is often volatile, with big swings from one month to the next, a broader view of the year shows the volume of total US apparel and textile imports were up 2.2% in the January to July period to 36.50bn SME, from 35.71bn SME last year. Within this, textiles grew 2.9% to 21.16bn SME, while apparel shipments were up 1.4% to 15.35bn SME.

In value terms, total US apparel and textile imports were down 1.4% to $59.46bn year-to-date, from $60.32bn in the same period a year ago. Apparel imports dropped 1.9% to $44.98bn, while textiles dropped 0.1% to $14.49bn.

Again, only half of the top ten apparel supplier countries booked growth during the first seven months of the year, with Vietnam seeing the largest increase at 6.2% to 6.52bn SME.

Mexico booked the second highest gain, at 5.5% to 2.04bn SME. Imports from China, meanwhile, were down 4.3% to 14.32bn SME – although the country remains by far the biggest supplier of apparel to the US with a 41.5% share of the market. While Bangladesh, the third-largest supplier with a share of 6.9%, booked the largest drop in shipments of 5.9% compared with last year to 3.04bn SME.

El Salvador saw the second largest year-on-year decline at 5.4% to 1.08bn SME, while Indonesia also saw a decline, of 4.9% to 2.71bn SME. Cambodia meanwhile, booked a 3.7% drop to 1.18bn SME.

Taking a broader look at the data over a six-year period from 2010 to 2016, 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 3.35bn SME in 2016, increasing its share of total imports from 7.72% to 12.45%.

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, before falling again in 2016 to 11.17bn SME. The country has lost marginal market share, from 41.98% in 2010 to 41.50% last year.

Cambodia, Mexico and Pakistan, meanwhile, are all exporting less to the US than they were six years ago. Cambodia fell from 947.1m SME to 903m SME in 2016, decreasing its share of the total from 3.83% in 2010 to 3.35% last year.

Apparel volumes - 6-year overview

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

Click on the individual countries to add or remove  

Facts behind the figures 

Vietnam 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. In volume terms the country increased its share of US imports last year, rising from 11.52% in 2015 to 12.45% in the 12 months to December 2016.

Manufacturers in Vietnam stand to gain from improved access to the EU import market once the EU-Vietnam free trade agreement comes into force, as well as increased foreign direct investment that flowed into the country's textile and clothing sector ahead of the now-abandoned Trans-Pacific Partnership (TPP) trade agreement.

The country has seen a massive 48.3% surge in total garment, textile, fibre and yarn exports in the first six months of the year, with the industry expected to reach its export target of US$31bn for the year. It is also preparing for an expected 6.5% in Vietnam's minimum wage in 2018, although this will be the lowest increase in 11 years. 

The government recently said it wants to shift the country's clothing manufacturing sector from its current low-cost model to an added value sector that includes design and branding. This will help offset competition from neighbouring Cambodia and Myanmar, China, India, Bangladesh and Sri Lanka.

Vietnam textile and garment exports jump 48% in first-half

Vietnam garment sector prepares for shift to value added

Vietnam minimum wage set to increase 6.5% in 2018

Faced with ongoing factory safety concerns, Bangladesh's apparel shipments to the US were on a downward trajectory between January and May this year. The South Asian country's clothing industry has built its reputation as a low-cost sourcing destination, and 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.

However, two fatal terrorist attacks in Dhaka, and a safety warning by the US State Department earlier this year, left garment buyers rethinking travel plans, reigniting concerns over a potential economic fallout for a sector reliant on foreign investment. But garment exporters have insisted that business continues as usual in the country.

In June, Primark, Hennes & Mauritz (H&M) and Inditex were among the first to join a number of major apparel brands and unions in signing a new and improved Bangladesh Accord that will run to 2021 and promises to offer new worker protections and ensure more factories are inspected and renovated. The agreement includes additional commitments to the right of workers to organise and join a union in order to protect their own safety. So far the '2018 Accord' has been signed by 15 brands.

The Bangladesh Garment Manufacturers & Exporters Association (BGMEA) has also proposed the launch of a government-led 'Shomman' system to follow up factory safety work, although experts have questioned its rationale and potential effectiveness. There have also been warnings that brands and retailers could stop sourcing from the country if it refuses to play ball on tackling outstanding labour rights issues.

An analysis published on just-style last month looked at the challenges facing Bangladesh garment imports – and why the country has been left behind as its competitors have moved forward.

Bangladesh exports see slowest growth for 15 years

Bangladesh '2018 Accord' promises new worker protections

Doubts over BGMEA Bangladesh factory safety platform plans

A tale of three countries – Vietnam, India, Bangladesh 

While there continue to be concerns 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 as rising prices are largely being offset by productivity gains. 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. Data on China's apparel imports to the US last year show the country's prices are now lower than they were six years ago. 

Chinese companies, however, continue to innovate. Manufacturing giant TianYuan Garment Company – the largest producer of apparel for Adidas worldwide – is to make T-shirts in the US using a fully automated robotic workline.

China leads US apparel sources with falling prices

Is China losing its edge as a US apparel supplier?

China firm to make T-shirts in the US using Sewbots