US apparel onshoring: data spikes hype

Recently released US government data shows America’s domestic garment making industry has turned into an average, if much reduced over the past 20 years, Western industry.

In the first half of 2013, data from the US Census Bureau shows the dollar value of apparel shipments from US manufacturers increased 1.7% over the first half of 2012: broadly in line with the 1.1% increase over H1 2012 US consumer prices, though other US data seems to show US manufacturers increased their ex-factory prices far faster. The value of apparel imported over the same six months was 3.2% up on the same period of 2012, while the average price per square metre of apparel fell 2.5%, according to Clothesource’s reworking of US Office of Textiles and Apparel data originally provided by the Census Bureau

But the average number of workers employed each month by US garment makers in the first half of 2013, according to the US Department of Labor Statistics, fell 3.1% over the first half of 2012. As the graph below shows, these relatively small year on year changes contrast dramatically with the previous 20 years of constant, abrupt, decline

The anomalies between the various numbers probably reveal some interesting subtleties in how the US market is developing. But the top-line data seems to show a simple picture, and one that applies in NW Europe as well. US garment makers’ sales have stopped collapsing, and in cash terms at least are now showing some signs of revival. As is true throughout the West, prudent business owners continue to shed labour even though sales might be picking up: there is neither a new dawn of onshore manufacturing nor –  any more – a widespread collapse of a long-established way of life.

In practice, of course, these numbers conceal successful new businesses emerging and other, often longstanding, businesses continuing to struggle and sometimes still going under. For their owners and employees,  this often does amount to a new dawn or a lifetime’s work traumatically destroyed. But  that is how business works.

For the past 20 years, garment making in the richer parts of the West was possibly the most publicised example of an industry almost wiped out by low-wage competition in poorer countries. That process seems to have come to a halt: from now on we are likely to see a more complex set of events in Western garment and textile making. With examples of success and failure still easy to find, though, Western garment and textile making will be less easily turned into three-word soundbites.