According to foreign media reports, the turbulent U.S. economic outlook has led to reduced consumer confidence in economic stability in 2023. This may be the main reason why U.S. consumers are forced to consider priority spending projects. Consumers are trying to maintain disposable income to prepare for emergencies, which is also affecting retail sales of clothing and imports of clothing.
The fashion industry is currently experiencing a sharp decline in sales, which in turn is causing U.S. fashion companies to be wary of import orders as they worry about inventory piling up.
The fashion industry is currently experiencing a sharp decline in sales, which in turn is causing U.S. fashion companies to be wary of import orders as they worry about inventory piling up. In the second quarter of 2023, U.S. apparel imports fell by 29%, consistent with the declines in the previous two quarters. The contraction in import volume was even more obvious. After imports fell by 8.4% and 19.7% respectively in the first two quarters, they fell again by 26.5%.
Survey shows orders will continue to fall
In fact, the current situation is likely to continue for some time. The Fashion Industry Association of America conducted a survey of 30 leading fashion companies between April and June 2023, most of which have more than 1,000 employees. The 30 brands participating in the survey said that although government statistics showed that U.S. inflation fell to 4.9% at the end of April 2023, customer confidence has not recovered, indicating that the possibility of increasing orders this year is slim.
The 2023 Fashion Industry Study found that inflation and the economic outlook were the top concerns among respondents. In addition, the bad news for Asian apparel exporters is that currently only 50% of fashion companies say they “may” consider increasing purchase prices, compared with 90% in 2022.
The situation in the United States is in line with the rest of the world, with the apparel industry expected to shrink by 30% in 2023 – the global market size for apparel was $640 billion in 2022 and is expected to fall to $192 billion by the end of this year.
Decreased purchases of Chinese clothing
Another factor affecting U.S. clothing imports is the U.S. ban on clothing related to Xinjiang cotton production. By 2023, nearly 61% of fashion companies said they would no longer use China as their main supplier, a significant change compared with about a quarter of respondents before the epidemic. About 80% said they plan to purchase less clothing from China in the next two years.
In terms of import volume, U.S. imports from China dropped by 23% in the second quarter. China is the world’s largest clothing supplier, and although Vietnam has benefited from the Sino-US standoff, Vietnam’s exports to the United States have also fallen sharply by 29% compared with the same period last year.
In addition, U.S. apparel imports from China are still down 30% compared with levels five years ago, in part due to deflationary trends that have slowed unit price growth. In comparison, imports to Vietnam and India increased by 18%, Bangladesh by 26% and Cambodia by 40%.
Many Asian countries are feeling the pressure
Currently, Vietnam is the second largest clothing supplier after China, followed by Bangladesh, India, Cambodia and Indonesia. As the current situation shows, these countries are also facing continued difficult challenges in the ready-to-wear sector.
Data show that in the second quarter of this year, U.S. clothing imports from Bangladesh dropped by 33%, and imports from India dropped by 30%. At the same time, imports to Indonesia and Cambodia dropped by 40% and 32% respectively. Imports to Mexico were supported by near-term outsourcing and fell by only 12%. However, imports under the Central American Free Trade Agreement fell by 23%.
The United States is Bangladesh’s second largest ready-made garment export destination. According to OTEXA data, Bangladesh earned $4.09 billion from exporting ready-made garments to the United States between January and May 2022. However, during the same period this year, the revenue fell to $3.3 billion.
Likewise, data from India is also negative. India’s garment exports to the United States dropped by 11.36% from US$4.78 billion in January-June 2022 to US$4.23 billion in January-June 2023.
Post time: Sep-21-2023