By  on August 12, 2008

WASHINGTON — A flagging U.S. economy and a precipitous decline in consumer demand triggered the largest drop of apparel and textile imports from China in June in more than seven years.

Imports of textiles and apparel to the U.S. from the entire world also fell in June, marking the fourth consecutive month of declines, the Commerce Department said Tuesday. The overall U.S. trade deficit also narrowed in June to $56.8 billion from $59.2 billion in May.

The combined drop in imports from China, which fell 11.8 percent to 229 million square meters equivalent in June compared with a year earlier, was the biggest decrease from the world’s largest apparel supplier since February 2001, when textile and apparel imports to the U.S. fell 20.8 percent, according to Commerce’s Office of Textiles & Apparel.

Overall, the combined volume of apparel and textile imports to the U.S. fell 10 percent in June compared with 12 months earlier, following a 6 percent decline in May, a 0.6 percent drop in April and an 11.4 percent decrease in March. Imports fell by 475 million SME in June to 4.25 billion SME.

“Among a variety of imported consumer goods, apparel was one among many down sharply this month,” said Nigel Gault, chief U.S. economist at Global Insight.

Imported TVs, VCRs and household goods were also down sharply in June, Gault said.

“I think it’s an indication that the expectations on the part of retailers for what consumers are going to spend is pretty subdued,” said Gault. “Imports are responding to what the retailers anticipate they are going to be able to sell. Clearly, consumers have plenty of room to not buy the latest fashions or to make due with last year’s clothes a little while longer.”

Gault expects to see apparel and textile imports continue to slide for at least the next few months based on anecdotal evidence from retailers about the back-to-school season, which he said indicates more “softness.”

Charles McMillion, president and chief economist of MBG Information Services, said domestic textile producers have also pulled back on imports of raw materials as reflected in the import numbers.

“Demand is very weak and so it is having an impact on both our own domestic production as well as on imports and, of course, on prices in the textile industry,” said McMillion. “Textile production has been going down for some time at a time when imports were rising. Production is still going down and now imports are starting to slacken and that is a reflection of a weak market.”

Several other countries had significant apparel and textile import declines in June, including Pakistan, which fell 21.7 percent to 229 million SME; Canada, down 31.6 percent to 115 million SME, and Mexico, off 17.1 percent to 231 million SME.

The significant gains in apparel and textile imports came from two countries: Honduras and Vietnam. Imports from Honduras — a Central American Free Trade Agreement member — increased 22.6 percent to 137 million SME, while imports from Vietnam continued to rise, up 14.3 percent to 147 million SME.

The top five apparel suppliers in the past 12 months were China, Vietnam, Bangladesh, Honduras and Mexico. China also topped the textile import list, followed by Pakistan, India, Mexico and South Korea.

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