While the U.S. textile industry is several years into a revival that brought it back from the brink of extinction thanks to an onslaught of cheap imports, it now faces challenges of solidifying that new growth.
“The outlook is positive, while there’s no doubt that across the industry there is some softness,” Kim Glas, president and CEO of the National Council of Textile Organizations (NCTO), said. “Some of that is cyclical, but in general the trajectory of the industry over the last two years has seen significant growth and the industry is poised to continue that upward trajectory.”
Putting the industry in context, the value of shipments for U.S. textiles and apparel was $76.8 billion in 2018, while U.S. exports of fiber, textiles and apparel were $30.1 billion.
“We’ve seen increased investment in this sector in the last several years,” Glas said, noting that capital expenditures for textile and apparel production totaled $2 billion in 2017, the last year for which data is available. “We’ve seen a lot more automation in the industry, we’ve seen a lot more resurgence and we’ve seen some growth in exports to the world, including out Western Hemisphere partners.”
American textile companies work closely with suppliers in the North American Free Trade Agreement/U.S.-Mexico-Canada Agreement (USMCA), as well as the Central American Free Trade Agreement (CAFTA) countries that take advantage of the duty-free status on their shipment.
The pending approval of USMCA is of vital importance to the industry, as Mexico and Canada are the two largest export markets for the U.S. textile industry, totaling nearly $12 billion last year. According to Glas, several provisions in USMCA will help producers expand and build new business in the critical Western Hemisphere supply chain.
“We expect U.S. textile companies to export more to the region and invest more in the U.S. when USMCA is implemented,” Glas said. “Textile executives from North Carolina to New York have said they will seek to take advantage of the modifications in the trade deal and build new business in areas such as pocketing and sewing thread, as a result of stronger rules of origin and Customs enforcement.”
For the year ended Sept. 30, U.S. apparel and textile exports to the Western hemisphere were up 0.26 percent, according to NCTO. Apparel imports from CAFTA were also up 2.4 percent in the period, Glas said, “So, there is some good news here from the numbers that we’re seeing.”
The industry is operating in a “different” political time right now, with a lot happening on trade, but, as Glas noted, “I think that’s been a net benefit to our industry to try to strengthen our trade agreements, and to level the playing field for U.S. workers and manufacturers.”
As a result, more companies are looking to source more locally or source apparel in the U.S., with location to their customer base and low cost of energy among the key benefits. The new Vidalia Denim Mills is one U.S. factory determined to bring manufacturing back stateside, and it’s examples like this that point to continued growth in the industry, Glas noted.
Vidalia CEO Dan Feibus said on a visit to Louisiana facility in September that the company has invested $50 million in infrastructure and retrofitting its 900,000-square-foot manufacturing facility, a former Fruit of the Loom distribution center.
“Vidalia Mills is needed in the industry and hopefully can be a model for others to follow,” Robert Antoshak, managing director of Olah Inc., said.
Now, Vidalia, which purchased 40 selvedge denim weaving machines from Cone Denim, has begun yarn and denim production and is on track for a full ramp up in the first quarter.
“There is a real willingness from brands and retailers to think about sourcing in the United States because it makes sense from a sustainability point of view and it makes sense on the kind of product quality they are looking for,” Glas said. “What’s interesting is that this is not just a California or New York City based phenomenon, that’s it’s in areas of the country like North Carolina, like Louisiana, like Maine that provide context to a resurgence to a sector that many think went off shore many years ago.”
China tariffs have had their impact on sourcing with companies now looking at other options, whether it’s in Asia, the Western Hemisphere or the U.S., which could continue to mean growth for American manufacturing.