Vietnam led the top ten importers to the US in March

Vietnam led the top ten importers to the US in March

Apparel imports into the US saw double-digit growth from four of the top ten countries in March, with Vietnam leading the way, as retailers replenished stocks in preparation for the spring season.

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 7.6% month-on-month in March to 1.93bn square metre equivalents (SME), compared with 2.09bn SME booked in February.

The figures also show the volume of apparel imports dropped 7.9% against March last year, and were down 4.2% to $5.82bn in value terms.

In terms of individual supplier countries, all but two of the top-ten recorded a year-on-year increase, with four recording double-digit growth.

China – the largest supplier of apparel to the US – saw shipments climb 15.5% year-on-year to 544m SME, up from the 785m SME recorded in February. The second-largest supplier, Vietnam, booked an increase of 19.5% to 271m SME – a turnaround from February's 8.9% decline.

Bangladesh, ranked number three in the top-ten league table, saw a 1.9% fall year-on-year to 169m SME, while Cambodia booked an increase of 6.1% to 77m SME. India, meanwhile, saw shipments climb 3% to 112m SME.

Of the remaining top-ten supplier countries, Nicaragua, new to the list last month, featured again, with a year-on-year increase of 9.5% to 49m SME, while El Salvador saw growth of 15.1% to 76m SME. Indonesia shipments were up 4.3% to 116m SME, Honduras shipments were up 14.1% to 99m SME, while Mexico booked a year-on-year decline of 5.8% to 75m SME.

Total US apparel and textile imports in March were down 4.9% from February, falling to 4.48bn SME from 4.71bn SME month-on-month. Textile shipments into the US were up, by 4.6% to 2.55bn SME year-on-year.

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 1.2% in the January to March period to 14.67bn SME, from 14.50bn SME last year. Within this, textiles grew 0.9% to 8.23bn SME, while apparel shipments were up 1.5% to 6.44bn SME.

In value terms, total US apparel and textile imports were down 3.9% to $24.29bn year-to-date, from $25.27bn in the same period a year ago. Apparel imports dropped 2% to $18.92bn, while textiles dropped 10.1% to $5.36bn.

All but four of the top ten apparel supplier countries booked growth during the first three months of the year, with Nicaragua seeing the largest increase at 11.1% to 134m SME.

Vietnam booked the second highest gain, at 10.2% to 898m SME. Imports from China, meanwhile, edged up 1.7% to 2.40bn SME – the country remaining 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 1.05% drop in shipments last year to 512m SME.

Mexico saw the largest decline at 6.6% to 207m SME, while Cambodia's apparel shipments to the US fell 2.3% to 233m 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

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 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.

Recent 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. Yet, an analysis of 2016 trade data by Dr Sheng Lu, assistant professor at the Department of Fashion and Apparel Studies at the University of Delaware, shows that while the country looks set to maintain its lead into the future, increasing competition is coming from suppliers in the Western Hemisphere who offer faster speed to market.

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Is China losing its edge as a US apparel supplier?

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

The industry is also calling on the government to create a development strategy to 2025, with a vision towards 2040, in order to help domestic 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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Nicaragua, meanwhile, has appeared in March's top ten list, replacing Pakistan for a second month in the rankings. Benefiting from the Dominican Republic-Central America FTA (DR-CAFTA) free trade agreement, a number of Nicaragua's manufacturers have set out their ambitions to boost their production to meet rising demand from US apparel brands.

The country, which produces for companies including Under Armour and Nike, benefits from low wages and a stable economic and political environment. Nicaragua's government has also managed to negotiate five-year collective wage agreements, adding further stability for manufacturers.

In percentage terms, of the Central American countries that export to the US, Nicaragua's textile export volume grew the fastest last year. In 2016, export volumes amounted to 531.3m SME compared to 488.1m in 2015. The country operates around 264 apparel and textile companies in its free zone, according to the National Free Zone Commission (CNZF).

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