PPI FOR FEBRUARY SHOWS WOMEN’S APPAREL GAIN

Byline: Joanna Ramey

WASHINGTON — Wholesale prices for U.S.-made women’s apparel in February posted their largest month-to-month jump in more than two years, but the surge in raw materials costs aren’t getting blamed — yet.
According to the Producer Price Index released Wednesday by the Labor Department, women’s apparel prices rose a seasonally adjusted 0.5 percent against January, the greatest monthly rise since a 0.3 percent increase in January 1993.
However, analysts tend to view the February figure as relatively undramatic and mainly as a statistical blip in line with the erratic ups and downs posted by such prices in recent months. Against a year ago, the women’s apparel prices last month were down 0.7 percent against February 1994.
A Labor analyst said there was no indication the uptick reflected apparel makers’ having to pay more for materials due to the increased synthetic fiber and cotton prices. He pointed to the preceding months where, in light of rising material costs, women’s apparel prices at wholesale had posted as many declines as increases. For example, in January women’s apparel prices at the wholesale level fell 0.8 percent following a 0.2 percent rise in December.
“I haven’t heard of [any mills] saying they’ve been able to pass through the raw material price increases” to apparel makers, said David Link, chief economist, the American Textile Manufacturers Institute. However, Link said, this pattern could be changing, noting how the uptick in synthetic fiber and processed yarn and thread prices are starting to be reflected in prices for gray fabrics and finished fabrics, or the next stages in textile production.
“There is a resistance out there to price increases that starts with consumers and gets pushed back down the pipeline. It’s the textile person who is getting squeezed at the moment,” Link said. Gray goods prices shot up in February by 1.9 percent, following a 0.4 percent increase in January and a gain of 0.5 percent in December. The last to react to raw material price pressures, finished fabric showed a price increase of 0.7 percent for the month, following an increase of 0.2 percent in January and a 0.2 percent decline in December. Compared with February 1994, finished fabric prices last month were up 1.4 percent. For all textile products, prices increased 0.5 percent for the month and were up 1 percent over the year.
Soaring raw cotton prices moderated a bit in February, increasing 2.4 percent following a 6 percent hike in January. Over the year, cotton prices last month were up 25.2 percent.
It’s hard to forecast to what extent continued hikes in textile costs could be passed on to apparel makers, said Carl Priestland, chief economist, American Apparel Manufacturers Association.
“Somebody is going to have to blink, and I’m not sure who is going to blink first,” said Priestland, calling this period in apparel manufacturing the most competitive it has ever been. Because this pressure isn’t likely to let up, if textile prices keep increasing, Priestland foresees some price hikes being pushed through the pipeline with textile manufacturers, apparel makers and retailers each absorbing their share of the increase in order to stay competitive and keep consumers buying.
Meanwhile, in the overall economy, prices for all finished goods at the wholesale level increased 0.3 percent in February and were up 1.7 percent over the year. All apparel prices increased 0.4 percent for the month and were up 0.2 percent from February 1994.
Wholesale prices for girls’, children’s and infants’ apparel in February rose 1 percent for the month and were down 1 percent over the year. Prices for men’s and boys’ apparel at the producer level increased 0.5 percent for the month and were up 1.4 percent over the 12-month period.
Within the individual women’s apparel categories, items with the largest price swings included separate tailored suit-type jackets, which increased 5.1 percent for the month and were down 5.7 percent over the year, and dresses, up 1.7 percent for the month and down 3.6 percent from February 1994.
Prices for leather coats and jackets increased 3 percent for the month and were off 10.1 percent from year-ago levels, as skirt prices increased 0.8 percent for the month and were down 3.6 percent from February 1994. Wholesale prices for blouses and shirts declined 0.4 percent for the month and were up 0.6 percent from year-ago levels.
— Fairchild News Service