WHOLESALE WOMEN’S APPAREL PRICES INCREASE 0.2% IN MAY FROM APRIL

Byline: Joanna Ramey

WASHINGTON — Wholesale prices for U.S.-made women’s apparel continued to show a gradual strengthening in May, rising 0.2 percent from April, the Labor Department reported Friday.
It was the sixth consecutive month without a decline.
Compared with year-ago levels, women’s wholesale apparel prices increased 0.9 percent.
Don Ratajczak, director of the Georgia State University Economic Forecasting Center, said the upward trend in women’s apparel reflects strong demand at retail.
By posting small but steady price increases, domestically produced women’s apparel is showing it can survive competition from low-priced Asian imports being unloaded on the world market, Ratajczak said. U.S.-made women’s apparel is largely in good stead regarding prices because much of it is either fashion-oriented or targets a market willing to pay higher prices for more quality garments, he said.
That’s not the case for domestically produced girls’, children’s and infants’ wear, however. Wholesale prices in this category in May declined 0.8 percent from April and were off 0.6 percent from May 1997. And Ratajczak expects even bigger declines as Asian countries work to dig themselves out of their economic crisis by bolstering exports.
“The people in Asia are fighting to earn anything they can earn. They’re just dumping stuff on the world market,” he said.
Carl Priestland, an economist with the American Apparel Manufacturers Association, said he isn’t surprised by the decline in girls’, children’s and infants’ wear prices. While Asian countries are lowering their apparel prices, domestic producers also have to contend with the absence of quota since the first of the year for most infants’ apparel imports. The elimination of quota in infants’ apparel, category 239, is part of the 10-year phaseout of quota on textiles and apparel, which is to be complete by the start of 2005.
There was $1.2 billion worth of imports in category 239 into the U.S. last year. For the first quarter of 1998, imports in this category were up 19 percent.
All wholesale apparel prices for the month declined 0.1 percent, but were up 0.6 percent from May 1997. Prices for men’s and boys’ apparel increased 0.2 percent for the month and were up 0.3 percent over the year.
While apparel has been able to post year-over-year wholesale price gains, prices for all finished goods at the producer level haven’t increased in a year. For the first five months of 1998, they are down an annual rate of 1.6 percent. For May against April, the PPI showed an overall gain of 0.2 percent.
Prices for domestic textiles in May remained unchanged against April and increased 0.6 percent over the year.
Among the women’s apparel tracked by the Labor Department that showed notable price fluctuations in May were skirts, which increased 1 percent for the month and were up 1.5 percent over the year. Outerwear prices were unchanged in May, but increased 6 percent from year-ago levels; prices for sport shirts were unchanged for the month, but increased 3.1 percent from May 1997 levels. Wholesale prices for sweaters, jackets and jerseys increased 0.2 percent for the month and were up 0.3 percent from year-ago levels.

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