Imports have reduced demand for domestically made apparel, hurting revenue
New York, NY (PRWEB) December 21, 2014
The Men's and Boys' Apparel Manufacturing industry in the United States has experienced dwindling downstream demand due to its uncompetitive nature relative to apparel manufacturers abroad, creating stress for industry operators. In recent years, clothing retailers have constantly slashed prices in order to unburden themselves from overstocked inventories. This trend trickled down to the manufacturing sector and exacerbated the reduction in revenue. In response, industry operators implemented their own price cuts to attract customers, though this move ultimately caused profit margins to significantly decline. Although profit is expected to stabilize in 2014, many industry participants have already opted to either consolidate or move production offshore to reduce costs. During the five years to 2014, the number of industry manufacturers is expected to decline.
According to IBISWorld Industry Analyst Zeeshan Haider, “The United States has lost about 90.0% of its apparel manufacturing jobs over the past 20 years due to high import penetration.” Imports as a share of domestic demand increased from 2004 to 2009. Additionally, domestic companies are increasingly offshoring manufacturing activities to countries such as Bangladesh and Vietnam, which have access to low-cost labor. Intense price competition has drastically reduced industry revenue, which is expected to significantly decrease during the five years to 2014. IBISWorld expects revenue to fall in 2014 due to widespread offshoring and persistently competitive prices.
During the five years to 2019, IBISWorld expects revenue will continue falling. “Price competition will keep revenue low; however, higher consumer sentiment will set the stage for domestic production of high-quality, high-value items, such as premium denim,” says Haider. The pants, jeans and trousers segment is already increasing its share of revenue. The industry is also expected to benefit from reshoring, as it becomes increasingly expensive to produce in China and industry operators begin looking to other countries, including the United States, as potential hubs for production operations. This movement should decrease the rate of revenue decline in this industry, but is not expected to induce a significant recovery.
For more information, visit IBISWorld’s Men's & Boys' Apparel Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
Industry operators manufacture men's and boys' apparel from purchased fabric. Activities also include buying raw materials, designing and preparing samples, arranging for apparel to be made from raw materials and marketing finished apparel. This industry only includes companies that operate their own production facilities in the United States.
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