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Apparel Imports See Steep October Drop

U.S. trade deficit narrows in month.

WASHINGTON — Apparel imports to the U.S. fell sharply in October from a year earlier, declining 14.6 percent to 2 billion square meter equivalents, as retailers and apparel brands pulled back on orders heading into the holidays, in light of uneven consumer spending and a struggling economy.

Combined apparel and textile imports to the U.S. dropped 9.3 percent to 4.6 billion SME, the Commerce Department’s Office of Textiles & Apparel said Friday, with textile shipments off 4.5 percent to 2.5 billion SME compared with October 2010. The overall trade deficit narrowed to $43.5 billion in October, down 1.6 percent from September.

October’s declines in apparel imports followed a drop in September, two months that are traditionally strong for companies stocking inventory for the holiday season.

“It is a sign that retailers are protecting themselves and they don’t want to buy too many products if they are unsure they will sell them. Retailers are a bit wary of the holiday season,” said Gregory Daco, principal U.S. economist at IHS Global Insight.

Daco said IHS is expecting “decent numbers” for holiday sales, adding the forecast is a 5 percent increase, excluding gas and food, over last year. However, half of the predicted increase in holiday sales is due to higher prices, Daco said, noting that is not good news for consumers.

Nate Herman, vice president of international trade at the American Apparel & Footwear Association, noted that companies are carrying a lot of inventory that they brought in earlier in the year.

“They don’t want to be left at the end of the holiday season with a lot of excess inventory, so they dramatically pulled back [in October] orders and are trying to run through their inventories before they bring in more,” Herman said.

Eight of the top 10 supplier countries posted declines in combined textile and apparel imports to the U.S. in the month. Sourcing continued to shift away from China, the top supplier of textiles and apparel to the U.S., as combined shipments fell 9.9 percent in October to 2.3 billion SME compared with a year earlier. Apparel imports from China fell 17 percent to 941 million SME, while textile imports fell 4.2 percent to 1.3 billion SME.

“The overall numbers are down, but the shift is happening out of China,” Herman said. “Even if the overall import numbers were up, I still think China’s numbers would be down and Vietnam is the recipient of that.”

Combined apparel and textile imports from Vietnam, which, along with South Korea, were the only two countries with import increases in October, were up 3.3 percent to 288 million SME. South Korea’s shipments in the combined category rose 16.6 percent to 107 million SME.

Seven of the top 10 apparel suppliers posted double-digit year-over-year declines in October. Apparel imports from India fell 29.5 percent to 59 million SME, while imports from Bangladesh decreased 29.2 percent to 106 million SME. Apparel shipments from Pakistan, which is facing political instability and infrastructure problems, were off 26.5 percent to 45 million SME and imports from El Salvador dropped 19 percent to 65 million SME.