The global apparel industry witnessed a significant slowdown in March 2024, with import and export data declining in major markets. The trend is consistent with falling inventory levels at retailers and weakening consumer confidence, reflecting a worrying outlook for the near future, according to a May 2024 report by Wazir Consultants.
The decline in imports reflects the decline in demand
Import data from key markets such as the United States, the European Union, the United Kingdom and Japan are grim. The United States, the world's largest importer of clothing, saw its clothing imports fall 6% year-on-year to $5.9 billion in March 2024. Similarly, the European Union, the United Kingdom and Japan saw declines of 8%, 22%, 22% and 26% respectively, highlighting the decline in global demand. The decline in clothing imports means a shrinking clothing market in major regions.
The decline in imports is consistent with retailer inventory data for the fourth quarter of 2023. The data showed a sharp drop in inventory levels at retailers compared to the previous year, indicating that retailers are cautious about increasing inventory due to weak demand.
Consumer confidence, inventory levels reflect weak demand
The decline in consumer confidence further exacerbated the situation. In the United States, consumer confidence hit a seven-quarter low of 97.0 in April 2024, meaning consumers are less likely to splurge on clothing. This lack of confidence could further dampen demand and hamper a quick recovery in the apparel industry. The report also said that retailers' inventories fell sharply compared to last year. This suggests that stores are selling through existing inventory and are not pre-ordering new clothing in large quantities. Weaker consumer confidence and falling inventory levels indicate a decline in demand for clothing.
Export woes for major suppliers
The situation is not rosy for apparel exporters either. Major apparel suppliers such as China, Bangladesh and India also experienced a decline or stagnation in apparel exports in April 2024. China fell 3% year-on-year to $11.3 billion, while Bangladesh and India were flat compared to April 2023. This suggests that the economic slowdown is affecting both ends of the global apparel supply chain, but suppliers are still managing to export some clothing. The fact that the decline in apparel exports was slower than the decline in imports suggests that global apparel demand is still holding up.
Confusing U.S. apparel retail
The report shows a confusing trend in the U.S. apparel retail industry. While US clothing store sales in April 2024 are estimated to be 3% lower than in April 2023, online clothing and accessories sales in the first quarter of 2024 were only 1% lower than in the same period in 2023. Interestingly, US clothing store sales in the first four months of this year were still 3% higher than in 2023, indicating some underlying resilient demand. So, while clothing imports, consumer confidence and inventory levels all point to weak demand, US clothing store sales have unexpectedly increased.
However, this resilience appears limited. Home furnishings store sales in April 2024 reflected the overall trend, falling 2% year-on-year, and cumulative sales in the first four months of this year are about 14% lower than in 2023. This suggests that discretionary spending may be shifting away from non-essential items such as clothing and home furnishings.
The UK market also shows consumer caution. In April 2024, UK clothing store sales were £3.3 billion, down 8% year-on-year. However, online clothing sales in the first quarter of 2024 were up 7% compared to the first quarter of 2023. Sales in UK clothing stores are stagnant, while online sales are growing. This suggests that UK consumers may be shifting their shopping habits to online channels.
Research shows that the global apparel industry is experiencing a slowdown, with imports, exports and retail sales falling in some regions. Declining consumer confidence and falling inventory levels are contributing factors. However, the data also shows that there are some differences between different regions and channels. Sales in clothing stores in the United States have seen an unexpected increase, while online sales are growing in the UK. Further investigation is needed to understand these inconsistencies and predict future trends in the apparel market.
Post time: Jun-08-2024