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December Apparel Imports Regain Footing, Exports Surge

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Apparel imports picked up in December, but continued to underperform after turning in a dismal performance in November due largely to the impact of the West Coast port slowdown.

According to data released last week by the U.S. Commerce Department, apparel imports increased by 3 percent in the month from December 2013, to over $6.8 billion. The increase was less than half the gain turned in by all U.S. goods and services imports, which grew by 7.3% to $197 billion.

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The dollar’s steady rise and precipitous drop in oil prices helped spur the increase, as did the fact that many shippers are now diverting imports to ports on the Gulf and East coasts to avoid the impact of the West Coast port slowdown resulting from stalled labor negotiations.

On a 12-month smoothed basis, which corrects for volatility of data in a particular month, apparel import growth was 2.4% in December, even with November’s rate.

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Apparel imports reached a record $93.1 billion on a CIF basis in calendar 2014, a 2.3% increase over 2013.

China, Vietnam, Bangladesh and Indonesia were the top sources of U.S. imported apparel on both a dollar and volume basis in December, with China at $2 billion, Vietnam with $678 million, $345 million for Bangladesh and $316 million for Indonesia. The dollar value of imports from Vietnam grew by 8 percent over December of last year, while those from China fell by 2.7%. Imports from Bangladesh enjoyed the biggest increase in the month, of almost 17 percent compared to last December.

For the full year, Vietnam was the fastest growing source of U.S. imported apparel, increasing 14 percent on a dollar basis to $9.2 billion, or more than 11 percent of total imports.

Apparel exports continued to outperform the total export market, however, increasing 11.1% to $467 million. Overall exports of goods and services rose by only 1.9% in the month, no doubt hurt by the strong dollar.

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On a 12-month smoothed basis, apparel exports accelerated slightly to 6 percent in December from November’s 5.2% pace.

At $2.1 billion in 2014, or 34 percent of the total, Canada was the biggest market for U.S. apparel exports last year, followed by Mexico ($1 billion), the U.K. ($314 million), Japan ($259 million) and Honduras ($129 million).

Apparel exports to Mexico surged by more than 13 percent last year, making it one of our fastest growing apparel export markets. Once a major production hub for U.S. apparel manufacturers, Mexico’s rising wage rates have made it less attractive for production, but more attractive as a consumer market for U.S. and European brands.

Exports to Chile, Australia and Hong Kong grew by mid- to high-single-digit rates in 2014 to about $100 million each, placing them among the top 10 destinations for U.S. apparel exports.

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