WASHINGTON — So much for a Bangladesh fallout.
This story first appeared in the August 7, 2013 issue of WWD. Subscribe Today.
Retailers and brands have not been pulling apparel orders out of the Asian nation, new U.S. government trade data showed Tuesday, despite major catastrophes in the last nine months that claimed the lives of more than 1,200 garment workers and caused a flurry of activity aimed at factory safety and what many expected to be a slowdown in sourcing from the country.
It has been just a few months since the Rana Plaza building collapse that killed 1,129 people at the end of April — the worst apparel industry disaster on record — and a fire that swept through Tazreen Fashions claimed the lives of 112 workers last November, sparking a global outcry and mobilizing U.S. and European companies, unions and human rights groups to formulate their own fire and building safety action plans. The tragedies also led the U.S. to suspend some trade benefits to Bangladesh and prodded the government of Bangladesh to collaborate with industry and pass its own reforms.
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Industry observers have watched the U.S. import numbers closely to gauge whether companies would pull apparel orders out of Bangladesh in the wake of the tragedies, but the latest trade data released by the U.S. Commerce Department on Tuesday showed a sharp increase in apparel imports from the country. Combined apparel and textile imports from Bangladesh, the sixth largest supplier to the U.S., rose 11.9 percent to 158 million square meter equivalents in June compared with a year earlier. Apparel imports, which account for the majority of shipments from Bangladesh, rose 13.3 percent to 135 million SME in the month. For the first six months of the year, combined apparel and textile shipments from Bangladesh rose 9.6 percent to 868 million SME.
“I think everyone is looking at the Bangladesh numbers and wondering if there will be an impact because of some of the problems in Bangladesh last year and this year, but obviously that is not the case so far,” said Julia Hughes, president of the U.S. Association of Importers of Textiles & Apparel.
Stephen Lamar, executive vice president at the American Apparel & Footwear Association, said: “If the disasters had caused people to really reassess their sourcing strategies, I think you would see that over the longer term.”
Hughes and Lamar said the new financial commitments by retailers and brands to improve fire and building safety might ultimately encourage companies to continue putting business into Bangladesh.
“Some folks feel that actually what has happened is going to keep Bangladesh’s import numbers up at the levels they are at now because companies have made strong financial commitments to help turn around the industry,” Hughes said. “So they are not likely to move their orders outside of Bangladesh.”
Overall, combined textile and apparel shipments from the world to the U.S. fell 0.6 percent to 4.7 billion SME in June compared with a year earlier. Apparel imports rose 1.2 percent to 2 billion SME, while textile imports fell 2 percent to 2.7 billion SME for the period.
Vietnam, the third largest supplier to the U.S., posted the largest increase of 13.1 percent in June to 310 million SME compared with June 2012. Imports from China, the top supplier of textiles and apparel to the U.S., edged up 0.4 percent to 2.3 billion SME in June compared with a year earlier.
Vietnam posted the largest increase in just apparel imports, which rose 16 percent to 194 million SME, followed by Bangladesh and Cambodia, which had a 10.4 percent increase to 75 million SME.
“Retailers are definitely remaining concerned about not having too much inventory, but I think the trend is we are continuing to see growth month by month by month and that is a reflection of the economic recovery and perhaps a very cautious building up of consumer confidence and retail sales,” Hughes said.
The overall trade deficit narrowed 22 percent to $34.2 billion in June from $44.1 billion in May as oil imports fell and exports of goods and services rebounded strongly.