Bruce Springsteen wrote, “They’re closing down the textile mill across the railroad tracks. Foreman says these jobs are going boys and they ain’t coming back.”
It seems The Boss was wrong.
What began as an unlikely topic of conversation a few years ago — a revival of the U.S. textile industry — in the fallout of the Great Recession has become a dynamic industrial movement.
A recent survey of major American fashion and retail companies by the U.S. Fashion Industry Association indicated the continued rise of domestic sourcing. The U.S. ranked fifth among the respondents’ sourcing destinations, with 53 percent sourcing from home. Nearly 39 percent of the respondents said they plan to increase sourcing by value or volume in the U.S. in the next two years and 80 percent of the companies said they already source in America.
The resurgence of domestic production stems from a variety of factors, including rising wages in China and the sharp decline in fuel prices in the U.S. Though this advantage might not last as long as hoped, with oil prices rebounding and China taking steps to devalue its currency.
“A lot also has to do with the cost of labor and electricity,” said Rick Helfenbein, president of Luen Thai USA and chairman of the American Apparel & Footwear Association.
A report, “Recovery of the U.S. Textile Industry,” said last year the cost of power per kilogram of yarn in the U.S. was 16 cents, equivalent to 5 percent of costs, while in China it stood at 42 cents, or 9 percent, and in India it was 29 cents, or 8 percent.
Helfenbein also noted that the domestic textile sector has benefited from exports to North American and Central American Free Trade Agreement countries. U.S. exports of textiles and apparel increased 3 percent in 2014 to $592 million, with 75 percent coming from fabrics, fibers and yarns, according to the U.S. International Trade Commission.
Nearly two-thirds of U.S. textile exports during 2014 went to Western Hemisphere free trade partners, according to the National Council of Textile Organizations. The U.S. textile industry exported to 199 countries, with 25 countries buying $100 million or more a year. Yarn spinning and knitting have been at the heart of the comeback, as those companies have been able to more fully automate their factories compared to makers of woven fabrics and the labor-intensive cut-and-sew industry. Concentrated in the Los Angeles area, and the Carolinas and Georgia, these mills have been building and investing in their businesses in the last few years with a focus on the quick-turn, quality and flexibility they offer.
Andy Long, vice president of sales and marketing at Tuscarora Yarns in Mount Pleasant, N.C., said, “We’re working with companies that aren’t treating this as a test anymore, but are interested in pursuing programs and want what we bring to the market, which is quality yarns, competitive pricing and fast turns on production.”
David Sasso, vice president of international sales at Buhler Quality Yarns in Jefferson, Ga., said the key factor driving the revival of U.S. manufacturing is “speed — the ‘I want it now’ retail and consumer attitude.”
Asher Fabric Concepts, a Los Angeles-based knitter for the contemporary, activewear and yoga markets, has seen its business grow to the point where it has opened a New York showroom for the first time. Jolie Fierro, vice president of sales, said the firm has received healthy business from active brands and “a lot of start-ups in New York” attracted to its flexibility and speed of production.
Jim Andriola, sales manager for Texollini, said the company has also seen action from new firms coming into the local market. Andriola said, “I have three companies that I’m working with — one in New York and one each in Boston and Philadelphia.”
Helfenbein said, “Those companies that are able to survive and compete today are doing so because of speed to market and flexibility, and carving out a niche industry. We’re able to spin very efficiently in this country.”
A report last month from the International Textile Manufacturers Federation said U.S. yarn production grew 4.4 percent in the first quarter of 2015 compared to the year-ago period and ITMF analysts expect the positive trend to continue. Brian Mandt, ITMF senior economist, said reshoring to the U.S. to supplement offshore production to meet demand for “quick turnaround items for fashion” has played a key role in the recovery.
In the “Recovery” study, Mandt noted that in May, employment in U.S. textile mills rose to 119,400, the highest level since September 2011. Capacity utilization rates for mills reached 82.3 percent, and in the first quarter, income after tax in textile mills rose 43 percent year-on-year, the 11th straight quarterly increase.
The number of spinning machines shipped to the U.S. has climbed significantly over the last few years. In 2014, short-staple spindles shipped totaled 26,832, up from 13,056 the year before, and shipments of open-end rotors surged to 60,632 units, sharply up from 11,196 shipped in 2013.
Gildan Activewear is in the midst of a $250 million investment to build two new yarn-spinning facilities in North Carolina, each about 500,000 square feet. The venture is slated to create about 500 jobs.
In the last two years, textile companies from India, Mexico, Canada and China have unveiled new investment plans in the U.S. of more than $700 million, creating some 2,000 jobs in the Carolinas, Georgia and Louisiana.
In March, Peds Legwear opened a $16 million facility in Hildebran, N.C., at a former bankrupt hosiery mill. The company said the investment could create more than 200 jobs in the state.
The Montreal-based sock and legwear manufacturer reshored production with the re-engineering and reopening of the facility and has plans to expand by investing an additional $8 million, bringing the firm’s U.S. investment to $24 million.
Unifi Inc. broke ground in July on an 85,000-square-foot addition to its Repreve Recycling Center in Yadkinville, N.C. The expansion of the facility will increase capacity to produce Unifi’s Repreve recycled fiber brand and other premier value-added products by up to 60 million pounds annually. The $10 million investment will create an estimated 18 to 20 new jobs in Yadkin County.
“We continue to estimate annual growth in the NAFTA and CAFTA regions of approximately 5 percent,” Roger Berrier, Unifi’s president and chief operating officer, said on a conference call with analysts. “We anticipate that the growth in brands and retailers that are choosing to source their products in the Western Hemisphere will continue into the foreseeable future and we remain very confident and committed to the region and the importance that it has to our overall business.”