WASHINGTON — Wholesale prices for domestically produced apparel fell slightly by 0.1 percent in February, as the downward pressure on prices continued to pound U.S. textile and apparel manufacturers, the Labor Department’s Produce Price Index revealed Thursday.
Producer prices for all apparel fell 0.8 percent against February 2003, a continuation of the long-term price erosion plaguing domestic manufacturers.
The Labor Department recently completed a major overhaul of its PPI to fully capture growing industry segments, such as the service sector. As a result, the new index does not provide year-over-year data in many of the apparel and textile wholesale price categories because many were reclassified.
The category for domestically produced women’s apparel remained flat in February, following the same performance in January.
“The continued pricing pressure on U.S. producers is driving consolidation and efforts to gain any sort of pricing power on the part of U.S. producers,” said Charles McMillion, president of MBG Information Services. “This is further exaggerated in recent months because of the spike in energy costs.”
For all finished goods, producer prices rose a mere 0.1 percent in February, as skyrocketing energy prices tamed last month.
“We see a lot of pressure at the most basic raw-material level and it squeezes up the supply chain,” said John Anton, senior economist at Global Insight. “But consumers are not paying more, so someone in the middle has to be having their margins squeezed.”
Anton noted that the weak dollar has made imports less competitive except in the case of China, which pegs its currency to the U.S. dollar. Many claim China undervalues the yuan by as much as 40 percent, making it next to impossible for U.S. producers to compete.
“The competitive position of domestic people facing imports has improved, except against China,” Anton said.
Meanwhile, wholesale prices for gray fabrics rose 0.3 percent in February against January and inched up 0.4 percent compared with a year ago, while finished fabric prices fell 0.6 percent last month and 0.1 percent against a year ago.
Wholesale prices for the majority of women’s apparel categories tracked by the Labor Department remained flat again in February. In the new women’s category that includes apparel cut and sewn in the U.S., prices for knit shirts and blouses, woven shirts and blouses, dresses, skirts, tailored jackets and vests, jeans and slacks, sweaters and nightwear all remained unchanged in February.
In another new category based on apparel made in knitting mills, prices were also flat for the month. In that category, women’s knit shirt prices, and underwear and nightwear remained unchanged last month, while prices for panty hose and tights rose 0.1 percent and prices for finished sheer hosiery increased 0.8 percent.