Apparel imports into the US rose month-on-month in August as retailers remained focused on the back-to-school season and started to bring in their first autumn ranges. Only three of the top ten suppliers of apparel to the US recorded declines, including China – while Pakistan booked the month’s highest gain.
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 3.8% month-on-month in August to 2.73bn square metre equivalents (SME). The figures for August also show a 1.3% rise in volume against the same month last year, and 1.4% growth in value terms year-on-year to $8.35bn.
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In terms of individual supplier countries, seven of the top-ten recorded a year-on-year increase in August, with Pakistan booking the biggest growth.
China – the largest supplier of apparel to the US – saw shipments decline 0.6% year-on-year to 1.29bn SME, with imports from the country down 10.3% month-on-month from the 1.17bn SME recorded in July.
The second-largest supplier, Vietnam, booked a year-on-year increase of 1.2% to 331m SME – this compares to July’s increase of 3%.
Bangladesh, ranked number three in the top-ten US apparel supplier league table, booked a 2.5% rise year-on-year in August to 158m SME, up from 172m SME last month.
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By GlobalDataPakistan booked the highest growth, with exports surging 16.5% to 52m SME, while Indonesia booked the second-highest growth of the top ten countries, with shipments up 5.9% to 104m SME.
Of the remaining countries to book growth, Mexico saw an increase of 5.7% to 75m SME, while Cambodia recorded growth of 1.1% to 90m SME. India’s shipments were relatively flat on the year prior, edging up just 0.2% to 84m.
Meanwhile, Honduras recorded the largest drop at 11.3% to 87m, and El Salvador recorded a drop of 4% to 69m.
Year-to-date and six-year overview
In value terms, total US apparel and textile imports were up 4.4% to $73.06bn in the year-to-date, from $70bn in the same period a year ago. Apparel imports grew 2.5% to $54.52bn, while textiles were up 10.3% to $18.54bn.
Six of the top ten apparel supplier countries booked growth during the first eight months of the year, with Cambodia seeing the largest increase at 11.9% to 662m SME.
Pakistan registered the second highest gain, at 7.3% to 374m SME. Imports from China, meanwhile, were down 0.3% to 7.3bn SME – although the country remains by far the biggest supplier of apparel to the US with a 42% share of the market. Bangladesh, the third-largest supplier with a share of 6.9%, saw exports grow 3.8% compared with last year to 1.33bn SME.
Vietnam meanwhile, reported a 3% increase year-on-year to 2.51bn SME, and India a 1.7% rise to 771m SME. The largest decline was recorded by Honduras, whose exports to the US were down 7.6% to 650m SME.
Taking a broader look at the data over an eight-year period from 2010 to 2017, 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 3.60bn SME in 2017 – growing its share of total imports from 7.72% to 13.28%.
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. Shipments dipped again in 2016 to 11.17bn SME, and last year grew to 11.36bn. The country has lost marginal US apparel market share, from 41.98% in 2010 to 41.91% in 2017.
Cambodia, Indonesia, Mexico, El Salvador and Pakistan are all exporting less to the US now than they were eight years ago. Cambodia fell from 947.1m SME to 931m SME in 2017, decreasing its share of the total from 3.83% in 2010 to 3.43% last year.
Facts behind the figures
Pakistan booked the highest growth of the top ten countries for the month of August. Textiles and apparel contribute nearly 70% to the country’s total export earnings. It is the world’s fourth largest cotton producer, one of the world’s largest cotton users, and the sixth largest textile exporter.
The country’s current Textile Policy, which runs from 2015-2019, aims to double textile and clothing exports to US$26bn by 2019. Most recently, the Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) has urged the government to set up localised garment trading hubs to help boost the country’s apparel exports by acting as meeting points for manufacturers and buyers and allow the showcasing of ready-made garments.
A pilot project to improve the productivity, competitiveness and sustainability of small and medium sized enterprises (SMEs) has also launched in Pakistan’s textile and clothing sectors. The Sustaining Competitive and Responsible Enterprises (SCORE) programme from the ILO offers training to help companies grow and create more and better jobs by improving their competitiveness through better quality, productivity and workplace practices.
While it may be too early to see signs of any sourcing shifts away from China as trade tensions with the US intensify, the latest import figures continue to confirm its appeal to apparel buyers. Indeed, 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.
As reported in the latest ‘2018 Fashion Industry Benchmarking Study‘ from the United States Fashion Industry Association (USFIA), the most popular sourcing strategy for executives from leading US textile, apparel and fashion brands, retailers, importers and wholesalers remains “China plus Vietnam plus Many.”
But more companies say they plan to further diversify their production in response to the changing business and trade policy environment, especially with regards to China. This does not seem to be due to concerns about cost, but rather the worries about the escalating US-China trade tensions.
China, however, appears to be looking to mitigate any effects of the trade spat where it can and last month declared it will cut costs for foreign companies that want to trade with it. General customs clearance time for imports and exports and related supervision documents will be reduced by another one-third this year, and clearance fees will be lowered.
Benefiting from an expected decrease in sourcing from China by US fashion companies, Vietnam and Bangladesh are expected to play a bigger role as apparel suppliers for the US market. However, there are lingering concerns about the limits of Vietnam’s production capacity; and while Bangladesh enjoys a prominent price advantage over many other Asian suppliers, the risk of non-compliance remains a notable weakness.
