WASHINGTON — Wholesale prices for domestically produced women’s apparel rose 0.3 percent in December, according to the Labor Department’s Producer Price Index released Friday.
This story first appeared in the January 15, 2004 issue of WWD. Subscribe Today.
For the 12 months, wholesale prices for women’s apparel continued in a long-term deflationary pattern, falling 1 percent against December 2002. Producer prices for girls’, children’s and infants’ apparel remained unchanged in December and rose 0.7 percent against a year ago.
“Even with continuing demand growth, there is global oversupply and this is another indication that domestic producers have no pricing power,” said Charles McMillion, president of MBG Information Services. “They’ve been squeezed for eight years and we have really never seen anything like this sharp drop in prices.”
John Mothersole, senior economist at Global Insight, said he was surprised by the wholesale apparel prices.
“I was surprised because the initial reading coming into Christmas was that the acute weakness in pricing would start to dissipate, but that doesn’t seem to be the case,” Mothersole said. “No strength has been exhibited over the past year with the exception of girls’ prices, which have been flat-lining.”
For all finished goods, producer prices rose 0.3 percent in November, driven primarily by energy and food prices. Over the past 12 months the overall PPI index rose 3.9 percent — the largest increase in 13 years, according to Mothersole.
Meanwhile, wholesale prices for gray fabrics fell 0.1 percent last month and 1.9 percent against a year ago, while finished fabric prices fell 0.1 percent in December and fell 0.4 percent against December 2002.
Wholesale prices for the majority of women’s apparel categories tracked by the Labor Department remained unchanged in December, but fell sharply year over year.
Prices for knit outerwear, sport shirts and sweatshirts were an exception with a 5.4 percent increase in December and a 0.8 percent increase against December 2002.
Wholesale prices for skirts were flat last month and rose 0.6 percent against a year ago, while prices for sweaters, jackets and jerseys remained unchanged in December but plunged 8.9 percent against December 2002. Domestically produced prices for dresses rose 1.3 percent last month but fell 1.1 percent against a year ago.