WASHINGTON – Figures from a new paper by the US International Trade Commission (USITC) suggest that talk of a ‘Made in the US’ resurgence in textiles may be premature. The figures show that after four years of decline, US textile shipments increased in 2017 to US$39.6bn, much of this – over 60 per cent – for the domestic market. However, this figure remained three per cent below the 2013 level. Textile exports also remain static. At US$10.6bn, US textile exports in 2017 were below the five-year high of US$12.1bn in 2014. The paper argues that in the domestic US apparel sector, the available evidence suggests that in recent years “reshoring has taken place, albeit on a modest scale.”
Says the paper: “Rather than simply increasing capacity, some of the new investment is likely replacing existing equipment, as firms upgrade and modernise their manufacturing processes and/or focus their operations on different products. However, along with new investments, there have been closures and restructuring in some segments of the industry. For example, in late 2017, Cone Denim, an iconic domestic producer of denim, announced the closure of its US denim plant.”
“Much of the new investment is by foreign firms, including new investments by Chinese and Indian firms, as well as by firms from Mexico, Canada, Turkey, and Saudi Arabia, to name a few. The domestic industry has also announced investments to expand capacity, as well as to open new plants.”
The paper suggests that data on investment, shipments, trade, and employment provide only “mixed evidence of an industry in recovery.” Total capital expenditures in plants and equipment for the textile and textile product sectors increased by 36 percent in the 2013–16 period, rising from US$1.6bn in 2013 to US$2.1bn in 2016, the latest year for which data are available. The 2016 level was also well above the pre-recessionary level in 2008 US$1.4bn suggesting these sectors are seeing a resurgence.
Adds the paper: “Anecdotal evidence points to significant investment in the textiles sector. We reviewed reports of new or planned investments (those announced from January 2014 through December 2017), which showed 59 publicly announced new or planned investments in the US textiles sector.
The paper suggests that any growth in investment or shipments is not reflected in employment data. Employment in the textiles sector declined by four per cent from 131,000 in 2013 to an estimated 126,000 in 2017. Moreover, the paper suggests that although statements by industry experts suggest the industry has invested in technology to increase labour productivity, official data on labour productivity for yarns and fabrics – which accounts for most of the employment in the textiles sector – show steady declines during 2013–16.
Full paper can be viewed HERE
