NEW YORK — Don’t pop those champagne corks just yet.
That’s the word from textile executives who warned that despite the increase in employment throughout their industry in November, it’s premature to get euphoric.
As reported, the textile industry in November gained a seasonally adjusted 3,000 jobs compared with October, according to government figures. Textile industry employment was 674,000 in November, compared with 671,000 a year ago.
A major reason for the jump in employment, executives said, was that in October, new orders for textiles surpassed textile shipments for the first time this year. Shipments in October were $6.27 billion, while new orders hit $6.54 billion.
In addition, many firms are beefing up their export efforts, as the North American Free Trade Agreement and GATT increase their presence on the international textile scene.
“I don’t know if we should get too excited about the numbers, but I do know that we are looking at a reasonable year ahead,” said William Armfield 4th, vice chairman of Unifi and president of the American Textile Manufacturers Institute. “As we go forward,” he added, “we are going to have to be more competitive on a global basis — and that means greater exporting. And, for that, we need good people.”
Alfred Greenblatt, president of the apparel, home fashions and industrial business unit of Guilford Mills, said the employment figures do signal a strengthening of the domestic industry.
“We’re seeing more business coming back on shore, there’s NAFTA, there are cotton shortages throughout Asia and there are more 807 programs, all of which will benefit our industry,” Greenblatt said.
Greenblatt noted that Guilford employs about 5,000 worldwide, and between 4,000 and 4,500 throughout the U.S.
“We’re holding to that number right now, but we’d like to start getting more as the business improves,” Greenblatt said. “The long-range outlook looks good, but there will be short-range fluctuations.”
Still, the increasing number of imported textile and apparel products, the rising cost of raw materials, which many mills thus far have not been able to pass onto their customers, and even GATT and NAFTA, which have mills looking to establish operations outside U.S. boundaries, could stifle growth in U.S. employment in the textile industry.
“Eventually, with prices of cotton and polyester continuing to rise, the people at the mill level — at least to some extent — may feel the impact of that,” Unifi’s Armfield said.
“We are a highly capital-intensive industry, but people do play a major role. As more and more firms look to keep costs down, textile employees may bear the brunt of that.”
While Armfield wouldn’t speculate on the effect that raw materials prices would have on employment, he said: “If it impacts jobs in the textile business, then it hurts. The increase is something that has to be shared by everyone.” According to ATMI, sharply higher operating costs in relation to sales across the industry caused a steep drop in fourth-quarter profits in 1993, bringing the year’s profits after taxes down to $1.4 billion, a 31 percent drop from 1992’s record level.
And, even though the November employment numbers do show an improvement, they are still far below the average monthly employment of 726,000 the industry achieved in 1988. Since that year, the industry numbers have dropped off considerably.
The average monthly employment in the textile industry in 1989 was 720,000, followed by 692,000 in 1990 and 670,000 in 1991. While the industry did rebound in 1992 to a monthly average of 674,000, it dropped off in 1993 to 671,000.
“I do think that at least in the short term, the textile business should do all right, but in the long run, trade agreements don’t add employment,” said Seth Bodner, executive director of the National Knitwear and Sportswear Association. “They may add more high-paying jobs, but there will be a net job loss.
“People keep talking about how the industry is exporting,” Bodner said, but imports continue to take a growing bite of the domestic market.
While the value of exports, on a percentage basis, are growing faster than imports, they continue to be heavily overshadowed by the import numbers.
According to the ATMI, the 1993 textile and apparel trade deficit was a record $33.8 billion, an 8 percent increase over 1992. Textile and apparel imports were valued at $44.5 billion, up 8 percent from a year earlier, while exports amounted to $10.7 billion, up 8.3 percent. For the nine months through September of this year, imports were valued at $36 billion, while exports were valued at $8.8 billion.
In square meters equivalent, 1993 imports of textile and apparel came to 15.85 billion SME, up 9.1 percent from 1992.
For the latest monthly 1994 figures, in September, total textile and apparel imports were 1.58 billion SME, the second largest ever import month next to August’s 1.73 billion SME. For the first nine months of 1994, imports were 13 billion SME, up 9.2 percent from last year.
“The figures underscore the fact that there will be a huge erosion of the textile industry here,” Bodner said. “It very much depends upon who the mills’ customers are…if those mills themselves are devoted to industries that are not disappearing, such as home furnishings and automotive businesses. If they’re out selling apparel textiles, it’ll be tough.”
“From our standpoint, one month’s figures don’t indicate any specific trend occurring,” said a spokesman for Burlington Industries, one of the textile industry’s larger employers at about 23,800. “Employment figures tend to follow textile cycles: When business is up, employment is up. When it’s down, the numbers are down.
“Overall, our business has been good and should continue,” the Burlington spokesman added. “We have expanded plants, modernized, and employment has been up significantly this year over last.”