INDUSTRY IMPORTS DECLINE IN AUGUST

Byline: Kristi Ellis

WASHINGTON — Apparel and textile imports dropped by 3.6 percent in August, representing an already slowing economy, with Mexico taking the biggest hit.
Apparel imports were down 1.7 percent, while textile imports plunged 5.6 percent in the month compared with August 2000, bringing the growth rate for the first eight months of the year to 0.7 percent over a year ago. August reversed a 2.4 percent uptick in apparel and textile imports in July.
For the year-to-date, overall imports increased 155 million square meters equivalent, to 22.28 billion SME from 22.12 billion SME in the comparable year-ago period.
“If this trend continues with September imports, we will have a second-quarter decline,” said Donald Foote, director of the agreements division of Commerce’s Office of Textiles and Apparel. “It would be the first time since the fourth quarter of 1995 to the second quarter of 1996 that textiles and apparel declined on a sustained basis.”
Mexico, the number one supplier to the U.S., suffered the biggest decline, with a 14.7 percent drop in textile and apparel imports in August. For the year-to-date, imports from the country were down 7.23 percent.
“Yarn [man-made fiber filament] is taking down trade,” said Foote.
Worldwide, man-made fiber filament yarn dropped 15.7 percent for the year-to-date, while yarn imports from Mexico dropped 27 percent for the first eight months. For the year-to-date, overall imports from Canada, the second-ranked supplier, rose 2.58 percent; imports from China fell 2.99 percent; and imports from Pakistan rose 8.3 percent.
Julia Hughes, vice president of international trade at the U.S. Association of Importers of Textiles & Apparel, attributed the monthly decline in apparel and textile imports to a shift in delivery schedules.
“I heard from a number of companies that are still shipping goods they plan to sell for holiday,” said Hughes. “Normally, in October, everybody has already shipped holiday goods.”
She said many companies have shifted to just-in-time deliveries and are warehousing products for shorter periods of time or not at all. Hughes also noted weak retail sales have had a major impact on imports.
“It is a little surprising to see that NAFTA countries are taking the hit first,” said Hughes. For the month, imports from Canada and Mexico were down a combined 10 percent.
“That could reflect changes among U.S. manufacturing shifting some production,” she said.
Meanwhile, September’s import figures and patterns will likely represent the impact of the Sept. 11 terrorist attacks and subsequent military action in Afghanistan, said Charles McMillion, chief economist at MBG Information Services.
Prior to the attacks, demand had been slowing and retailers were scaling back their holiday plans, McMillion said.
“I am expecting lots of friction in the supply chains immediately after the events of Sept. 11,” he said. “Security concerns were so great that getting product back and forth across the Mexican border or any border was really difficult.”