The volatile economic outlook in the United States has led to a decrease in consumer confidence in economic stability in 2023, which may be the main reason why American consumers are forced to consider priority spending projects. Consumers are striving to maintain disposable income in case of emergency, which has also affected retail sales and imports of clothing.
Currently, sales in the fashion industry are significantly declining, which in turn has led American fashion companies to be cautious about import orders as they are concerned about inventory buildup. According to statistics from January to April 2023, the United States imported clothing worth $25.21 billion from the world, a decrease of 22.15% from $32.39 billion in the same period last year.
Survey shows that orders will continue to decline
In fact, the current situation is likely to continue for some time. The Fashion Industry Association of America conducted a survey of 30 leading fashion companies from April to June 2023, with most of them having over 1000 employees. The 30 brands participating in the survey stated that although government statistics show that inflation in the United States dropped to 4.9% by the end of April 2023, customer confidence has not recovered, indicating that the possibility of increasing orders this year is very low.
The 2023 fashion industry study found that inflation and economic prospects are the top concerns of respondents. In addition, the bad news for Asian clothing exporters is that currently only 50% of fashion companies say they “may” consider raising procurement prices, compared to 90% in 2022.
The situation in the United States is consistent with other regions around the world, with the clothing industry expected to shrink by 30% in 2023- the global market size of clothing was $640 billion in 2022 and is expected to decline to $192 billion by the end of this year.
Reduced procurement of clothing in China
Another factor affecting US clothing imports is the US ban on cotton related clothing produced in Xinjiang. By 2023, nearly 61% of fashion companies will no longer consider China as their main supplier, which is a significant change compared to about a quarter of respondents before the pandemic. About 80% of people said they plan to reduce their purchases of clothing from China within the next two years.
Currently, Vietnam is the second largest supplier after China, followed by Bangladesh, India, Cambodia, and Indonesia. According to OTEXA data, from January to April this year, China’s clothing exports to the United States decreased by 32.45% compared to the same period last year, to $4.52 billion. China is the world’s largest clothing supplier. Although Vietnam has benefited from the deadlock between China and the United States, its exports to the United States have also significantly decreased by nearly 27.33% compared to the same period last year, to $4.37 billion.
Bangladesh and India feel pressure
The United States is Bangladesh’s second largest destination for garment exports, and as the current situation shows, Bangladesh is facing continuous and difficult challenges in the garment industry. According to OTEXA data, Bangladesh earned $4.09 billion in revenue from exporting ready-made clothing to the United States between January and May 2022. However, during the same period this year, revenue decreased to $3.3 billion. Similarly, data from India also showed negative growth. India’s clothing exports to the United States decreased by 11.36% from $4.78 billion in January June 2022 to $4.23 billion in January June 2023.
Post time: Aug-28-2023