The pandemic-fueled, months-long decline in U.S. apparel imports eased off in October as brands and retailers restocked shelves for the holiday surge, according to data released Friday by the Commerce Department’s Office of Textiles & Apparel (OTEXA).
The volume of apparel imports rose 5.2 percent to 2.52 billion square meter equivalents (SME) in the month compared to October of last year. However, the value of those monthly shipments was down 6.9 percent to $6.93 billion year over year.
These figures were in sharp contrast to year-to-date apparel imports, which were down 25.56 percent in value to $53.96 billion in the first 10 months of the year. In volume terms, shipments declined 19.63 percent in the period to 19.25 billion SME, according to OTEXA.
The good news for importers and their suppliers is that companies seem to have finally worked off much of the inventory that built up as stores closed and consumer demand plummeted as a result of the economic fallout of the coronavirus pandemic. PVH Corp., for example said last week that it continues to tightly manage its inventory, which decreased 16 percent as of the end of its third quarter ended Nov. 1 compared to the prior-year period.
PVH also said it continues to reduce the amount of basic inventory it projects to carry into spring. As of the end of fiscal 2020, the owner of Calvin Klein and Tommy Hilfiger projects it will carry approximately $100 million of basic inventory into spring, a decrease from the prior projection of $125 million.
The bad news is that the economy is expected to continue to wobble, at least until Covid-19 vaccines are widely available and potential fresh economic stimulus from Congress and the incoming Biden administration calm the waters and inject more demand into consumer channels, economists are forecasting.
There’s also little good news on the horizon for still-top supplier China, which has seen its apparel imports decline 42.33 percent to $12.8 billion year to date through October compared to the prior-year period. For the month, imports from China fell 11 percent to $1.81 billion in value, but rose 11.2 percent in volume to 103.25 million SME.
However, with President-elect Joe Biden saying last week that he plans to keep the tariffs imposed by the Trump administration in place, at least in the short term as leverage to get China back to negotiating fresh trade reforms, the country’s position is seen as tenuous, as many importers have already shifted sourcing strategies.
Among the top Asian suppliers showing strength in the month were Bangladesh, up 17.2 percent to 28.87 million SME; Cambodia, increasing 16.1 percent to 16.5 million SME; Pakistan, with a gain of 27.4 percent in volume to 14.68 million SME and 31.1 percent in value to $169.06 million, and India, up 9 percent in volume to 96.88 million SME.
Guatemala had a comeback month, as well, with gains of 9 percent in value to $128.26 million, and 5.5 percent in volume to 29.43 million SME. Turkey also had increases of 7.9 percent in volume to 8.92 million SME and value of 3.9 percent to $58.52 million.
The U.S. Census Bureau and the U.S. Bureau of Economic Analysis reported the goods and services trade deficit was $63.1 billion in October, up $1 billion from a revised $62.1 billion in September. The deficit with China increased $2.2 billion to $26.5 billion in October. Exports increased $1.1 billion to $13.1 billion and imports increased $3.3 billion to $39.7 billion.
The deficit with Mexico rose $1.1 billion to $11.8 billion in October. Exports increased $700 million to $19.2 billion and imports were up $1.8 billion to $31 billion. The deficit with the European Union decreased $1.6 billion to $15.7 billion in October. Exports fell $200 million to $19.4 billion and imports decreased $1.8 billion to $35.2 billion.
