According to articles from foreign analysts, U.S. clothing wholesale inventories are currently beginning to decline, which may have a positive impact on future order flows. In addition, U.S. apparel imports have slowed down in volume in 2022, but due to a jump in unit prices, the import value in U.S. dollars has further surged.
Clothing inventory analysis
Figure 1: Quarterly changes in U.S. apparel imports
Figure 2: U.S. store apparel and apparel retail sales
Figures 1 and 2 illustrate a downward trend in U.S. wholesale apparel inventories that could have a positive impact on future order flows (depending on macroeconomic developments).
Figure 1 clearly shows the plummeting volume of U.S. cotton apparel imports in the fourth quarter of 2022, down 29.4% year-on-year. Total clothing imports fell by about 25.5%, of which chemical fiber clothing fell by 23.7% and wool clothing fell by only 11.5%. And Figure 2 shows that U.S. apparel and apparel sales have not slowed down recently.
Outlook review: Affected by the new crown epidemic, from the end of 2019 to 2020, logistics obstruction slowed down the speed of imports. Wholesale inventories fall, and with that comes over-ordering. Starting in the third quarter of 2021, excessive imports and tight global monetary policies have increased financing costs, and wholesalers may interrupt ordering due to a potential economic recession, although this has not yet occurred.
Average import levels: Over the past 11 years, the United States has imported approximately 2.95 billion pieces of clothing per quarter (orange line). Looking back at the recent period of high volatility, from the third quarter of 2019 to the present, the average quarterly import volume is approximately 2.825 billion pieces/quarter, and inventories are decreasing. Anecdotal evidence suggests that textile supply chain orders have flowed back, and if the global economy can avoid a hard landing, order flow should be maintained.
Limitations of the analysis: Figure 1 is based on import arrivals, and there is a time lag between the wholesaler/retailer placing an order and the product actually clearing customs and being included in the import data. Additionally, Figure 2 is based on import volumes (and therefore somewhat distorted by inflation), while Figure 1 is based on volume. Overall, this analysis has certain limitations.
U.S. apparel imports in 2022
U.S. apparel imports have slowed in volume in 2022, but imports in U.S. dollar terms have soared further as unit prices jumped.
Significantly higher raw material costs are partly responsible for the volume decline. After increasing by 32% in 2021, the import volume of cotton clothing has stagnated in 2022, with the import unit price increasing by 20.3% and the import value increasing by 21%.
In the category of man-made fiber clothing, the import volume increased by 8.4%, while the import value increased by 22.5%, and the unit price increased by 13%.
However, results vary widely across product categories.
Cotton woven shirts jumped 42% (men/boys) and 23.4% (women/girls) in volume. In comparison, women’s/men’s cotton trousers fell by 2.8%, while men’s/boys’ cotton trousers increased by only 6.3%.
Knitted garments are more affected by the surge in material costs than woven garments. Cotton sweaters only increased by 1% in the women’s/girls category, while chemical fiber sweaters fell by 3.9%.
Unit prices in 2022 are significantly higher than in 2017, reflecting new long-term trends. In the previous 30 years, the globalization of the clothing market has caused unit prices to fall, and with climate change and material costs continuing to rise, unit prices are likely to rise in the next few years.
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