WASHINGTON — Strikes, protests and political instability in Bangladesh and Cambodia appear to be sending producers back to China, which posted the largest increase in combined U.S. apparel and textile imports in November.
This story first appeared in the January 8, 2014 issue of WWD. Subscribe Today.
Retailers and brands have been diversifying their sourcing to become less dependent on China, particularly as wages rates nearly tripled in that country in recent years. But recent worker unrest in other supplier countries could once again change the sourcing paradigm and shift more production back to China.
Overall, apparel and textile imports to the U.S. rose 5.2 percent to 4.4 billion square meter equivalents in November compared with a year earlier, according to the U.S. Commerce Department’s Office of Textiles and Apparel. The U.S. trade deficit narrowed to a four-year low, according to IHS Global Insight, falling to $34.3 billion from $39.3 billion in October.
Apparel and textile imports to the U.S. from China jumped 14 percent to 2.2 billion SME in November compared with a year earlier. Apparel imports from China increased 6.2 percent to 778 million SME, while textile imports gained 18.5 percent to 1.4 million SME.
“I think this mad rush to get out of China [has stopped],” said Nate Herman, vice president of international trade at the American Apparel & Footwear Association. “People have realized they can’t pull as much out of China as they were hoping and they also have found that other countries don’t have the same capability yet that China does. Secondarily, wages and political turmoil [in Bangladesh and Cambodia] are a factor. China is a very stable place to operate, at least for the moment.”
Julia Hughes, president of the U.S. Fashion Industry Association, said, “Clearly, China is viewed as a safe haven,” noting it still controls a 41 percent share of the U.S. apparel market.
Combined apparel and textile shipments from Bangladesh, which has been beset by labor unrest over wages and working conditions following two factory tragedies that claimed the lives of more than 1,240 workers in the past 14 months, rose just 0.2 percent to 131 million SME. Apparel imports, which comprise the majority of Bangladesh’s imports to the U.S., fell 2.2 percent year over year, after posting a dramatic increase of 42.5 percent to 152 million SME in October.
“The larger political situation has made it difficult to get product made there and out of the country,” Herman said.
Combined imports from Cambodia were up 4.8 percent to 84 million SME in November, but companies are keeping a close eye on the country, which has also seen violent protests.
Another area of concern for fashion firms is Pakistan, which posted a 20 percent drop in year-to-year combined shipments to 178 million SME in November. Herman said Pakistan has had “major problems” with electricity in recent months.