The US textile industry says it has demonstrated enormous resiliency and value to the economy during the pandemic, but that lessons need to be learned and the government needs to support the sector going forward if it is to exit the current crisis stronger and more agile.
Testifying on the ‘Supply Chain Resiliency and the Role of Small Manufacturers’ Small Business Committee’s Subcommittee last week, National Council of Textile Organizations (NCTO) president and CEO Kim Glas said there is much to learn from studying and acknowledging the overwhelming challenges the industrial base confronted during the ongoing pandemic.
“As our country faced devastating challenges in responding to Covid-19 beginning last spring, US textile manufacturers stepped forward and answered America’s call during this time of crisis. [They] quickly mobilised to find innovative solutions to the crisis, proactively retooling production lines and retraining workers to provide US-made PPE to front-line medical workers.”
Glas told the committee that while domestic textile manufacturers remain a fully committed partner in the government’s efforts to battle the pandemic and supply essential PPE, the severity of the economic crisis brought on by Covid-19 and its impact particularly on small businesses cannot be overstated.
“Despite all their PPE production efforts, many US textile companies were confronted with idle capacity, rampant cancellation of orders, plant closures, and workers being furloughed at the height of the pandemic.
“Covid-19 has created unprecedented demand destruction for apparel and textiles. Billions of dollars of orders for fiber, yarn, and fabric were cancelled last year as retail shopping outlets were closed for many months and then operated at reduced capacity.”
Figures from the Census Bureau, cited by NCTO, show that for March through May 2020, clothing sales were down US$44bn, or 66%, relative to the same three months in 2019. While there was some improvement in the latter months of 2020 and moving into 2021, sales are still not back to pre-pandemic levels.
“The collapse in demand has been felt throughout the supply chain, including very acutely among small manufacturers,” Glas continued.
“While the US textile industry and its small-business backbone has undertaken heroic efforts to confront the ongoing crisis, the onshoring of a permanent PPE industry will only materialise if proper government policies and other actions are put in place to help domestic manufacturers survive the current economic crisis and incentivise the long-term investment needed to fully bring PPE production back to the United States.
Glas added, now that PPE orders have largely subsided as China continues to dominate the marketplace and vaccines continue to be deployed, many companies are sitting with idle equipment purchased during the pandemic while struggling with legitimate concerns over the long-term viability of producing PPE in the US. Further compounding the problem is a severe shortage of labour across the industry exacerbated by the Covid-19 crisis.
“Without strong federal government policies to incentivise this production chain long term, including domestic procurement requirements and other production investments, our industry fears that this opportunity to onshore the domestic PPE supply chain will be lost forever. We simply cannot let that happen — this is a serious public health security and national security issue.”
Glas detailed five key policy recommendations supported by 20 trade associations and labor groups, representing the entire domestic supply chain aimed at strengthening the integrated US textile sector:
- Strengthen ‘Buy American’ procurement rules
- Provide funding assistance for companies to reconstitute domestic supply chains important to US national and healthcare security
- Key contracting reforms
- Streamline the SBA loan application process
- Provide additional funding for workforce training