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 13.6% month-on-month in February to 2.09bn square metre equivalents (SME), compared with 2.42bn SME booked in January. Conversely, the large volume in January came as factories in Asia shipped a surge of products ahead of Lunar New Year shutdowns.
The figures also show the volume of apparel imports dropped 11.8% against February last year, and were down 14% to $6.12bn in value terms.
In terms of individual supplier countries, only one of the top-ten recorded a year-on-year increase, with four recording double-digit declines.
China – the largest supplier of apparel to the US – saw shipments fall 16.8% year-on-year to 785m SME, down from the 1.07bn SME recorded in January. The second-largest supplier, Vietnam, booked a decline of 8.9% to 279m SME – a turnaround from January’s 23.5% increase.
Bangladesh, ranked number three in the top-ten league table, saw a 2.1% fall year-on-year to 167m SME, while Cambodia booked the largest decline of 20.3% to 75m SME. India, meanwhile, saw shipments tumble 7.8% to 96m SME.
Of the remaining top-ten supplier countries, Nicaragua was new to the list with a year-on-year increase of 9.9% to 46m SME, while El Salvador saw a fall of 5% to 62m SME. Indonesia shipments were down 13.5% to 113m SME, Honduras shipments were also down, by 2.5% to 85m SME, while Mexico booked a year-on-year decline of 11.8% to 70m SME.
Total US apparel and textile imports in February were down 14% from January, falling to 4.71bn SME from 5.48bn SME month-on-month. Textile shipments into the US were also up, by 6.67% to 3.06bn SME year-on-year.
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 0.8% in the January to February period to 10.19bn SME, from 10.27bn SME last year. Within this, textiles dropped 0.6% to 5.68bn SME, while apparel shipments slipped 1.02% to 4.51bn SME.
In value terms, total US apparel and textile imports were down 6.4% to $16.74bn year-to-date, from $17.88bn in the same period a year ago. Apparel imports fell 4.5% to $13.10bn, while textiles dropped 12.7% to $3.63bn.
Only two of the top ten apparel supplier countries booked growth during the first two months of the year, with Nicaragua seeing the largest increase at 12% to 85m SME.
Vietnam booked the second highest gain, at 6.6% to 627m SME. Imports from China, meanwhile, slipped 1.8% to 1.85bn 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 0.6% drop in shipments last year to 344m SME.
El Salvador saw the largest decline at 7.2% to 112m SME, while Cambodia’s apparel shipments to the US fell 6% to 156m 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.
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.
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.
Indeed, an analysis of China’s apparel imports to the US last year show the country’s prices are now lower than they were six years ago.
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.
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 in January.
Cambodia’s garment exports are growing in markets with beneficial access, like Canada, Japan and the EU, while shipments to the US have fallen over the past six 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.
Nicaragua, meanwhile, has appeared in February’s top ten list, replacing Pakistan 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).