WASHINGTON — Apparel and textile imports to the U.S. jumped at a double-digit rate in February on a year-over-year basis as apparel brands and retailers significantly boosted their spring merchandise inventories in anticipation of pent-up consumer demand.
Combined apparel and textile shipments to the U.S. rose 17.3 percent to 4.5 billion square meter equivalents in the month compared with February 2012, according to a monthly trade report from the Commerce Department’s Office of Textiles and Apparel. Apparel imports rose 17 percent to 2.1 billion SME, while textile imports increased 17.6 percent to 2.47 billion SME.
“I think we are finally starting to see that rebound in imports that we had been looking for in the last few months,” said Julia Hughes, president of the U.S. Association of Importers of Textiles and Apparel. “We hope and expect it will be the start of continuing growth [of imports] back into the U.S. with stronger consumer demand.”
Despite rising labor costs in China, which have forced some executives to seek alternative apparel production hubs in Asia, combined apparel and textile shipments from the top supplier to the U.S. rose nearly twice as quickly as the overall number, jumping 34.2 percent to 2.2 billion SME in February compared with a year earlier.
The increase for Vietnam, the third-largest supplier in the prior year, was the largest from any nation — 36.3 percent to 310 million SME. India, historically the second-largest supplier, saw total apparel and textile imports down 3.2 percent to 270 million SME.
“Even with the continued conversation in the industry about rising costs in China and China losing its competitiveness, the fact is that many U.S. apparel brands and retailers continue to place a substantial portion of their business there,” Hughes said.
Combined imports from Bangladesh, up 12.7 percent to 180 million SME, rose despite speculation that companies would shift business out of the country because of fire safety problems in garment factories that have led to two major fires and the deaths of at least 119 workers in recent months.
The tragic fires at Tazreen Fashion Ltd. and Smart Export Garment Ltd. in Bangladesh have led to an intensifying effort by labor groups to pressure retailers and brands to pay more to foreign factories producing their apparel and involve workers and labor groups in the fire safety training and overall worker rights discussions with the government of Bangladesh and the country’s main apparel associations.
The U.S. government has also stepped up scrutiny and is considering whether to revoke trade benefits given to Bangladesh under the Generalized System of Preferences, in the wake of the fires there and alleged violations of worker’s rights, including the right to bargain collectively and form unions, according to an AFL-CIO petition.
“It is a terrible tragedy that happened in Bangladesh, but I do think that most companies recognize they want to help the workers through remediation and improving safety procedures as opposed to pulling business out of Bangladesh,” Hughes said.
Looking at apparel imports alone, rather than the combined imports in the month, China had the largest increase of 38.7 percent to 857 million SME. This was followed by Vietnam, the second-largest apparel supplier to the U.S., with a 31 percent increase to 211 million SME. Apparel imports from Bangladesh rose 8.6 percent to 151 million SME.
The nation’s overall trade deficit narrowed to $43 billion in February from $44.4 billion in January as exports rebounded, driven primarily by stronger industrial supplies, led by fuel oil and petroleum products, according to Gregory Daco, senior principal economist at IHS Global Insight.
Daco said the foreign trade report will likely give an “upward nudge” to the first-quarter GDP growth estimate.
However, it might be premature for the import data to reflect any shifts of orders out of Bangladesh. Wal-Mart Stores Inc., for example, has reportedly canceled orders in Bangladesh and is said to have a policy to gradually wind down its sourcing in Bangladesh by early 2014, in the wake of the tragic fires, according to fashion industry sources. The world’s largest retailer also initiated a “zero tolerance” policy for violations in its global sourcing standards on March 1 and any new fires in Bangladesh could prompt quick action.