By  on May 12, 2008

WASHINGTON — Apparel and textile imports dropped sharply in March while the U.S. trade deficit narrowed, an indicator of the severe slowdown in the economy.

Textile and apparel shipments fell 11.4 percent to 3.7 billion square meter equivalents, driven by small gains or declines from most of the top 10 supplier countries, the Commerce Department reported Friday. The volume of textile and apparel imports to the U.S. in March was the lowest since December 2004 and contributed to a drop in the U.S. trade deficit to $58.2 billion in March from $61.7 billion in February.

Combined textile and apparel imports from China dropped 9 percent to 1.2 billion SME in March versus a year ago. Many of China's major declines were in apparel categories, including cotton trousers and cotton knit shirts and blouses. Chinese apparel imports fell 16.6 percent to 358 million SME.

Possibly indicating a shift in overall sourcing plans, Vietnam was able to post a 5.7 percent increase in apparel imports to 99 million SME, after months of more substantial growth. In February, Vietnam saw a 40.2 percent increase in apparel imports after expanding 58 percent in January.

Total apparel imports to the U.S. dropped 10.2 percent to 1.6 billion SME in March, a month that often sees import levels drop, but the tightening that month was deeper than normal.

"It's a natural consequence of consumers not spending freely in the U.S.," said Nigel Gault, chief U.S. economist at Global Insight. "If consumers are cutting back, then we don't need to import so much from the rest of the world."

If U.S. imports continue to slide, the impact will be felt by many other countries, Gault noted.

Cass Johnson, president, National Council of Textile Organizations, said the decline in the numbers comes as no surprise. "It's what we would expect in an economic slowdown," Johnson said.

The largest declines in apparel and textile imports were reported from Mexico, Canada and South Korea, continuing their drop in market share. The biggest increase in apparel and textile imports was from Honduras, which posted a 9.4 percent gain in shipments to the U.S. to 107 million SME.Despite the drop-off, China remained the number-one textile and apparel supplier to the U.S. The other top apparel suppliers in March were Vietnam, Bangladesh, Honduras and Mexico.

China, Pakistan, Mexico, India and South Korea were the top combined textile and apparel suppliers to the U.S. The top five countries shipping textiles to the U.S. in March were China, Pakistan, India, Mexico and Canada.

A spokesman for the National Retail Federation said one of the ways retailers can ride out an economic slowdown is by controlling inventory. The March import numbers bear that out, as cautious retailers respond to consumer uncertainty, he said.

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