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Apparel Prices Up

Producer prices climb 3 percent in year.

WASHINGTON — U.S.-made apparel prices increased 0.3 percent in April and were 3 percent higher than a year earlier, the Labor Department’s Producer Price Index showed Friday.

“We are seeing some degree of cost pressure still processing through the supply chain but these cost pressures are expected to moderate in the coming months, primarily because input prices are lower,” said Jeet Dutta, senior economist at Moody’s Analytics. “The need to pass along rising input costs at different stages of manufacturing along the apparel supply chain, whether it is sourced domestically or imported, is [lessening].”

Dutta said cotton prices, which drove up apparel prices at retail last year, are now “quite low” and will continue to fall, in light of India lifting its cotton export ban a few weeks ago.

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“There is a lot of weight on cotton prices and it is a bit surprising that apparel prices are still showing the strength that they are but I would project they will be moderating in the months ahead.”

While domestically produced textile input prices were in line with the overall decline in prices of finished goods, apparel prices bucked the trend. They did contribute to the increase in core prices, which exclude volatile energy and food prices. Wholesale prices on finished goods in the overall economy fell 0.2 percent in April on a seasonally adjusted basis. However, the core PPI index inched up 0.2 percent in April.

“The drop in the headline PPI in April was driven entirely by falling energy prices,” said Nigel Gault, chief U.S. economist at IHS Global Insight. “Outside energy, prices rose, but only modestly, with both food and core prices up 0.2 percent. And earlier in the supply chain, intermediate goods prices fell for the first time since December, while crude materials prices fell across the board — food, energy, and other materials were all down.”

Gault said the PPI news is “good for consumers since it signals that the bite from energy into their spending power will diminish, and good for producers, since it shows cost pressures easing.”

“It will also bolster the Fed’s confidence that the previous rise in gasoline prices created nothing worse than a temporary rise in inflation,” he added.

Women’s and girls’ domestically made apparel prices rose 0.4 percent in April compared with March and were 1.1 percent higher than April 2011. In the category, prices on nightwear, excluding robes, rose 7.3 percent last month and were 4.2 percent above a year earlier. Prices on knit shirts and blouses increased 2 percent in April and were 0.4 percent higher year-over-year. Wholesale prices on robes rose 1.7 percent in April and were 1.8 percent above a year earlier, while prices on jeans and slacks increased 0.4 percent last month and were 1.1 percent higher than April 2011.

Men’s and boys’ apparel prices rose 0.7 percent in April compared with March and were 8.5 percent higher than a year earlier. Prices on domestically made lightweight non-tailored coats, jackets and vests increased 7.4 percent in the month, while prices on work clothes and washable service apparel rose 1.5 percent last month and were 5.1 percent above a year earlier. Wholesale prices on jeans and jean-cut slacks increased 0.3 percent last month and were 18.3 percent higher than a year earlier.

Further down the pipeline, yarn prices fell 0.4 percent in April and were 13 percent below a year earlier, largely reflecting the steep drop in raw cotton prices from last year. Prices on finished fabrics rose 0.1 percent in the month and were 3.5 percent higher than April 2011. Wholesale prices on greige broad woven fabrics fell 2.2 percent in the month and were 4 percent lower than prices a year earlier. Prices on greige knit fabrics fell 1.6 percent in April and were 1.3 percent lower year-over-year.