NEW YORK — One hot issue in the textile industry of late has been the value of the dollar. Just last month, the American Textile Manufacturers Institute complained at a Congressional hearing that the strength of the dollar compared with other currencies was hurting domestic manufacturers.
This story first appeared in the July 9, 2002 issue of WWD. Subscribe Today.
ATMI president Carlos Moore said at the time, “the overvalued dollar…has had a devastating impact on the U.S. textile sector overall and on smaller textile enterprises and small communities in particular.”
Since that June 12 hearing, the dollar has begun to weaken slightly in comparison to the Japanese yen and the euro. Yet textile executives had varying opinions as to whether a weaker dollar would mean much to the business.
Cone’s Bakane said of the dollar’s decline, “I think it will have a favorable impact on the textile and apparel business, starting maybe in a quarter or two and then going out past that.”
Still, he pointed out that the most critical exchange rate for the textile industry is the dollar versus China’s yuan. The dollar has changed little in comparison with the yuan this year.
Nancy Marino, president of New York-based Linmark USA, a sourcing company, said the slide in the value of the dollar has had little affect on her importing business.
“It’s had some impact, but not a tremendous amount,” she said. “It’s a wait-and-see issue.”
Burlington’s Henderson said those who focus on the effect the dollar’s strength has on textile imports are losing sight of a larger issue: that the entire industry is dependent on the strength of the U.S. economy.
“While it may help our export business,” he said of the dollar’s decline, “it also will make the foreign investment coming into this country probably go down….And foreign investment has been financing the trade deficit.”
He said that any continued improvement in the textile business will depend on the broader U.S. economy remaining strong.
“We’re cautious” about second-half business, he said. “Our order backlog is healthy, and our deliveries are further out than we would like, but we are cautious about the economy, and we are cautious about consumer debt levels and we are cautious about world events.”
At Cone, Bakane agreed that the current volatility of the economy makes it difficult to predict whether the business will retain its recent strength in the second half.
“The environment is the most difficult to forecast that I’ve ever seen,” he said. “Whether it be about the strength and consistency of the recovery or about the impact of international trade, it’s just tough to forecast with any visibility. But having said that, my feeling is that our denim business will continue to see strength in the second half of the year and beyond that.”