Vietnam was only one of two countries to record an increase in US apparel imports in December

Vietnam was only one of two countries to record an increase in US apparel imports in December

US apparel import volumes declined in December as the holiday season came to an end. But while shipments from Vietnam continue on an upward trajectory, other top-three suppliers China and Bangladesh have seen their fortunes fluctuate. 

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 down 2.9% month-on-month in December to 1.99bn square metre equivalents (SME), compared with 2.05bn SME booked in November. 

The figures also show the volume of apparel imports dropped 1.5% year-on-year in December, while in value terms, imports were down 7.3% on December last year to $5.75bn.

In terms of individual supplier countries, only two of the top-ten recorded year-on-year increases, with Vietnam recording a double-digit hike.

China – the largest supplier of apparel to the US – saw shipments slip 0.03% year-on-year to 808m SME, with a decline of 1.7% on the 822m recorded in November. The second-largest supplier, Vietnam, booked an increase of 10.06% to 261m SME – higher than November's 8.2% increase.

Bangladesh, ranked number three in the top-ten league table, saw a drop of 3.26% year-on-year to 139m SME, while Cambodia booked the largest decline at 27.13% to 57m SME, a substantial slump on its 0.7% fall in November. India, meanwhile, saw shipments climb 2.79% to 73m SME.

Of the remaining top-ten supplier countries, Pakistan booked a year-on-year decline of 7.9% to 42m SME, while El Salvador saw a fall of 3.15% to 65m SME. Indonesia shipments were down 2.62% to 89m, Honduras shipments were down 0.77% to 90m SME, while Mexico booked a year-on-year decline of 0.72% to 60m SME.

Total US apparel and textile imports in December were down 6.2% from November, dropping to 4.82bn SME from 5.14bn SME month-on-month. However, textile shipments into the US were up 5.61% to 2.83bn SME year-on-year.

Apparel volumes - 12-month overview

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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 total US apparel and textile imports declined 0.9% in the 12 months from January to December to 62.92bn SME, from 63.52bn SME last year. Within this, textiles dropped 0.88% to 35.99bn SME, while apparel shipments slipped 1.06% to 26.93bn SME.

In value terms, total US apparel and textile imports in 2016 were down 6.44% to $104.72bn, from $111.93bn in the same period a year ago. Apparel imports fell 5.23% to $80.71bn, while textiles dropped 10.29% to $24.10bn.

Only four of the top ten apparel supplier countries booked growth during the last 12 months, with Vietnam seeing the largest increase at 6.9% to 3.35bn SME. The country is in second place with a share of 12.4% of US apparel imports.

India booked the second highest gain, at 2.02% to 1.04bn SME. Meanwhile, El Salvador and Indonesia also saw their imports into the US rise, with growth of 1.42% to 825m SME, and 0.29% to 1.27bn SME, respectively.

Imports from China, meanwhile, slipped 1.85% to 11.17bn 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 a 0.41% drop in shipments last year to 1.86bn SME.

Cambodia saw the largest decline at 14.1% to 903m SME, while Pakistan's apparel shipments to the US fell 9.52% to 535m 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

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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.

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 ahead of the now-abandoned Trans-Pacific Partnership (TPP) trade agreement.

Vietnam's apparel exports in 2016 are expected to hit targets of $29bn which, although higher than the $27.5bn achieved in 2015, is lower than an initial export target of $31m. There are calls for the government to create a development strategy to 2025, with a vision towards 2040, in order to help firms take advantage of opportunities from free trade agreements, as well as offset competition from neighbouring Cambodia and Myanmar, China, India, Bangladesh and Sri Lanka. 

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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 confirm it still remains the largest source for 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.

China's manufacturers are also continuing to invest overseas. Suzhou Tianyuan Garments Co, a garment producer for brands including Adidas and Reebok, announced plans late last year to set up a new US$20m factory in North America. And Shangying Global entered the US marketplace in October with its first international acquisition, purchasing global apparel manufacturer, designer, and merchandiser Oneworld Star International (OSI) in a deal worth $280m.

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India, meanwhile, one of the two top ten countries to report gains in exports to the US in December, remains a marginal player in world apparel trade. That said, efforts are underway to diversify its garment offering, and the country's apparel industry benefits from a huge untapped pool of low-cost workers, and a vertical cotton industry from farming to the production of finished goods. 

In June last year, India's garment exporters widely welcomed a series of financial and labour reforms announced by the government to generate 10m jobs and boost exports by $30bn over three years. The country's textile and apparel industry also received informal assurances of increased central government support after it was largely ignored in this month's national budget.

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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 $153 took effect last month.

Cambodia's garment exports are only growing in markets with beneficial access, like Canada, Japan and the EU, with shipments to the US having fallen for the past five years. The International Labor Organization (ILO) recently warned the country's textile and apparel export sector could also face both short and long-term risks as a result of the UK leaving the EU, while the country's recent rise to lower-middle income status could add to its challenges.

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