APPAREL, TEXTILES LOSE MORE JOBS IN JULY

Byline: Joanna Ramey

WASHINGTON--Employment in the domestic apparel and textile industries continued to slide in July, the Labor Department reported Friday, and so far this year, apparel has lost more jobs than any other U.S. manufacturing sector.
During the last seven months, apparel manufacturing has dropped 51,000 workers, 19,000 of whom were lost in July. That brings the industry to another all-time employment low of 909,000 workers, which is 60,000 below July 1994.
After losing 27,000 jobs this year, the textile industry now ranks third in job loss from January to July, behind the second-place transportation industry, which has shed 30,000 workers. At the end of July the textile industry, which lost 8,000 jobs for the month on a seasonally adjusted basis, employed 651,000 workers, which is 22,000 below year-ago levels.
"Textiles and apparel are having decidedly bad years," a Labor employment analyst said. "The job loss is no grand surprise."
Many textile and apparel factories apparently chose their two-week summer shutdown during July to permanently lay off workers, the analyst said. Industry observers note the jobs are being lost as companies consolidate operations, move production offshore or as smaller companies simply close, the analyst said.
The underlying causes for these changes are familiar to the industries. In textiles, higher raw materials costs forced companies' hands, industry analysts conclude. In apparel, the crippling factors continue to be competition from imports, a slowdown in consumer buying and subsequent pressure from retailers to keep prices low, they say.
"I'm afraid it's not the best outlook right now," said Carl Priestland, chief economist with the American Apparel Manufacturers Association.
Jeff Sands, national apparel practice director, KPMG Peat Marwick, said there are no signs of relief. He sees the apparel industry consolidating as retailers continue to demand low prices and look to trim the number of vendors they use in order to gain efficiencies.
"I think we are looking at the long-awaited consolidation of the apparel industry," said Sands. "It's been predicted for years that upon consolidation of retail and the advent of Quick Response and EDI, retailers would be looking to shrink dramatically the number of vendors they do business with to increase efficiencies.
"The apparel companies that are doing well are the larger companies. The companies that are struggling are the small ones. You have to be an important resource."
For textiles, which has been suffering from a decline in business this year after 2 1/2 years of hitting sales records and maintaining steady employment, there was some good news in the government statistics last week. According to the latest data, new textile orders in June increased 6.5 percent to $6.3 billion from May, an increase of 4.6 percent over June 1994.
"But the pressures are still there because of the increased fiber costs. The consumer won't accept price increases, and the producers are seeing higher fiber costs," said Donald Ratajczak, director of the Economic Forecasting Center at Georgia State University, Atlanta. He said another weak link in the industry is the decline this year in demand for carpet fibers; in the past the industry was able to offset drops in broadwoven orders. This pattern should reverse itself later this year as new construction picks up again, he said.
In the overall economy, the loss of 85,000 manufacturing jobs and the lack of meaningful new jobs in general, sent the unemployment rate in July creeping up to 5.7 percent against June's 5.6 percent. The increase reflects a general sluggishness in all manufacturing, analysts note.
As textile and apparel companies trimmed their payroll in July, they also cut back on the average number of hours worked by current production workers. In textiles, the work week last month dipped to 40.2 hours against 40.3 hours in June and 41.7 during July 1994. In apparel, the average work week dropped to 36.6 hours in July from 36.9 during June and 37.6 from a year ago.
The average hourly wage for textile workers in July remained at June's level of $9.39, but was up from July 1994's wage of $9.12. The average hourly wage of apparel workers last month was $7.60, the same as in June, but up from the year-ago wage of $7.31.
--Fairchild News Service

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