By  on April 20, 2005

WASHINGTON — Wholesale prices for U.S.-produced women’s and girls’ apparel fell 0.5 percent in March, but were up 0.4 percent compared with a year ago.

Producer prices for all apparel fell 0.1 percent in March against February, although they increased 0.4 percent versus March 2004, according to the Labor Department Producer Price Index released Tuesday.

“With energy costs rising, a lot of companies have gone as far as they can go in terms of lowering prices,” said Charles McMillion, president and chief economist with MBG Information Services. “The increases in the textile and apparel cluster were relatively modest and less than in other industries, and much less than rising energy costs.”

As a result, McMillion said producers are “really struggling and are being caught in a vise between very competitive pricing on the one hand, and rising costs for their production on the other….I think we’re going to see profits severely squeezed,” he said.

Prices in the textile sector are rising sharply, but rising energy costs are cutting into any profits, he said.

Driving by a 3.3 percent boost in energy costs, wholesale prices for all finished goods increased 0.7 percent in March, the biggest jump in five months. However, excluding the volatile food and energy prices, the overall core rate in the PPI rose 0.1 percent for a second month.

Wholesale prices for yarns rose 0.9 percent in March and were up 3.3 percent over a year ago, while prices for greige fabrics were down 0.2 percent in the month, but up 2.2 percent against a year ago. Prices for finished fabrics were up 0.3 percent last month and increased 3 percent against March 2004.

Swimwear was among the apparel categories showing significant wholesale price changes, falling by 14.8 percent last month and down 13.8 percent against a year ago. Producer prices for specific outerwear and girls’ sweaters rose 0.1 percent in March and were up 8.7 percent over a year ago.

In another category tracked by the Labor Department, wholesale prices for apparel made in knitting mills fell 0.3 percent in March and were flat compared with a year ago, while prices for knit shirts fell 0.6 percent last month, but were up 4.7 percent over a year ago. Producer prices for finished pantyhose and tights rose 0.1 percent in the month, but fell 0.6 percent year-over-year.

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