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First-Half Apparel Imports Jumped 24%. Will That Growth Last?

While major suppliers of U.S.-bound apparel saw their comparable shipments rise considerably in the first half of the year, others weren’t so fortunate in June, according to new data released Thursday.

Overall, American retailers and brands imported 24 percent more apparel in the six-month period to reach 16.57 billion square meter equivalents (SME), the Commerce Department’s Office of Textiles & Apparel (OTEXA) reported. However, June imports were up just 19 percent compared to a year earlier to 2.76 billion SME.

The state of the global economy marked by steep inflation and geopolitical unrest has caused many companies to lower the second-half outlooks, with many exporting nations bracing for the worst.

“In a highly dynamic macroeconomic environment, supply chain challenges and inflationary pressures accelerated during the quarter,” Scott Baxter, president, CEO and chair of Kontoor Brands, said Thursday. “Looking forward, we anticipate that macro conditions will remain challenging, particularly as retailer inventories are rebalanced and inflation weighs on overall consumer demand.”

On the manufacturing side, Shahidullah Azim, vice president of the Bangladesh Garment Manufacturers and Exporters Association, told Sourcing Journal last week that “we are worrying about coming days.”

“There is a silent, economic recession and inflation going on globally, with people having to consider food rather than fashion,” Azim said.

Despite ongoing political turmoil and punitive tariffs still in place, China remained the top supplier, with shipments from the country up a year-over-year 22.35 percent in the first half to 5.44 billion SME. But for June, China’s shipments were only up 12.6 percent compared to a year earlier to 1.04 billion SME. The country’s zero-Covid policy could be a factor in slowing shipment growth.

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Two other Top 10 producers of U.S. goods saw an even more precipitous decline. Imports from Pakistan, which increased 19.24 percent year over year in the first half to 514 million SME, declined 7.1 percent in June from last year to 67.82 million SME, while imports from Mexico were up 3.14 percent to 425 million SME in the six months, but fell 13 percent for the month to 69.32 million SME.

Among the rest of the Top 10 Asian suppliers, No. 2 Vietnam saw first half imports into the United States increase 20.5 percent to 2.7 billion SME, while June shipments were up 26.7 percent to 410.86 million SME. Imports from Bangladesh rose 44.1 percent in the six months to 1.76 billion SME and 46.5 percent in June to 282.49 million SME.

India’s shipments gained 36.19 percent year to date to 884 million SME and 43.2 percent in the month to 138 million SME, while imports from Cambodia increased 30.96 percent in the half to 733 million SME and 54.1 percent in June to 101.04 million SME and shipments from Indonesia were up 44.75 percent in the six months to 776 million SME and 42 percent in June to 108.08 million SME.

For key Western Hemisphere countries, imports from Honduras rose 9.75 percent in the first half to 462 million SME and 8.6 percent in June to 89.39 million SME, as shipments from Nicaragua increased 20.27 percent in the half to 331 million SME and 26.2 percent in June to 61.78 million SME.

Also on Thursday, the U.S. Census Bureau and Bureau of Economic Analysis announced that the goods and services deficit was cut by $5.3 billion to $79.6 billion in June.

The June decrease in the trade deficit reflected a decrease in the goods deficit of $4.9 billion to $99.5 billion and an increase in the services surplus of $300 million to $19.9 billion.

In the first half, the trade deficit increased $134.1 billion, or 33.4 percent, from the same period in 2021. Exports increased $246.2 billion or 20 percent, while imports were up $380.3 billion or 23.3 percent.