US apparel imports fell by more than a fifth month-on-month in May as the global garment industry continued to crumble under the destructive weight of Covid-19. However, there was a resurgence in shipments from Central America and Mexico as retailers appear to have turned to those suppliers closest to home as stores started to reopen.
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 down 21.4% month-on-month in May to 951m square metre equivalents (SME). This compares to 1.21bn SME the month prior.
The figures for May also show a 58.3% drop in volume against the same month last year and a 60% drop in value terms year-on-year to US$2.66bn.
In terms of individual supplier countries, all of the top-ten recorded a year-on-year decrease in May. El Salvador booked the largest volume decline at 91.51%, with shipments falling to 6m SME. Honduras was a close second with shipments down 89.04% to 10m SME. The third-largest fall was recorded by India where shipments fell 82.41% to 20m SME compared with May last year.
Apparel volumes - 12-month overview
Source:The Department of Commerce's Office of Textiles and Apparel (OTEXA)
China, the largest supplier of apparel to the US, booked a 53.98% tumble with shipment volumes falling to 393m SME.
The second-largest supplier, Vietnam, saw shipments fall 51.96% year-on-year to 162m SME. This compares to a 24.18% decline last month to 245m SME.
Of the remaining top-ten, Bangladesh, the third-largest supplier of clothing to the US, saw shipments plummet 65.76% to 61m SME, closely followed by Pakistan where shipments spiralled 64.17% to 20m SME.
Indonesia saw shipments drop by 51.51% to 45m SME, while those from Mexico were down 45.42% to 41m SME. Cambodia reported the smallest decline at 34.55% to 46m SME.
While all of the top ten individual supplier countries recorded year-on-year declines for the month of May – as to be expected in light of Covid-19 – four countries saw shipment volumes rise from April. Honduras saw shipments double from April, while those from Mexico surged 64%. El Salvador saw a 50% hike, while China’s apparel shipments were up by 15.6%.
Despite their month-on-month increases, both El Salvador and Honduras continued to lag far behind the other supplier countries in terms of import quantities in May. Sourcing powerhouse China, however, remains way ahead of the field with its volumes more than double that of its closest competitor, Vietnam.
Combined textile and apparel imports, meanwhile, fell 41.96% year-on-year to 3.55bn SME, and by 55% in value terms to $4.12bn. Textiles alone recorded a fall of 32.24% to 2.59bn SME, and in value terms were down 43% to $1.47bn.
Compared with the previous month, textile and apparel imports into the US were down 11.5% by volume.
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, saw 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.
The most pronounced year-on-year fall in apparel imports to the US during May once again came from Central American countries El Salvador and Honduras, where shipments from both countries tumbled by about 90%. The third-largest fall was recorded by India, whose shipments dropped by 82.41%.
Garment factories across Mexico and Central America shuttered or reduced their output towards the end of March as regional governments responded to the coronavirus outbreak and US demand slumped amid retail shutdowns to contain the global health emergency. Many manufacturers announced 90 to 120-day closures, with thousands of workers idled or operating on reduced hours.
El Salvador lost 20,000 apparel industry jobs this year and could lose another 5,000 as production plummets. The losses will dent the industry’s current headcount of 80,000 as exports fell by $453m from January to May, depressing annual sales by 42%.
The country’s quarantine, which is said to be among the strictest lockdown measures in the Americas was extended last month “through at least” 15 June, according to risk management company WorldAware.
Observers expect Central America’s apparel exports to likely hover at $4bn to $5bn this year as the pandemic slashes shipments by half.
However, the upside is that US clothing brands and suppliers could potentially shift parts of their production to the US, Central America and Mexico as they explore ways to make their supply chains faster and more responsive.
The first wave of US retailers began to tentatively outline their store reopening plans at the end of April with a view to reopening in early May. However, there are still big variations in how the 50 US states are opening up after lockdown, with some reimposing restrictions following a rise in coronavirus cases.