According to foreign media reports, the turbulent U.S. economic outlook has led to reduced consumer confidence in economic stability in 2023. This may be the main reason why U.S. consumers are forced to consider priority spending projects. Consumers are trying to maintain disposable income for emergencies, which is also affecting retail sales of clothing and imports of clothing.
The fashion industry is currently experiencing a sharp decline in sales, which in turn is causing U.S. fashion companies to be wary of import orders as they worry about inventory piling up. According to statistics from January to April 2023, the United States imported $25.21 billion worth of clothing from around the world, which was 22.15% lower than the $32.39 billion in the same period last year.
Survey shows orders will continue to fall
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 between April and June 2023, most of which have more than 1,000 employees. The 30 brands participating in the survey said that although government statistics showed that U.S. inflation fell to 4.9% at the end of April 2023, customer confidence has not recovered, indicating that the possibility of increasing orders this year is slim.
The 2023 Fashion Industry Study found that inflation and the economic outlook were the top concerns among respondents. In addition, the bad news for Asian apparel exporters is that currently only 50% of fashion companies say they “may” consider increasing purchase prices, compared with 90% in 2022.
The situation in the United States is in line with the rest of the world, with the apparel industry expected to shrink by 30% in 2023 – the global market size for apparel was $640 billion in 2022 and is expected to fall to $192 billion by the end of this year.
Decreased purchases of Chinese clothing
Another factor affecting U.S. clothing imports is the U.S. ban on clothing related to Xinjiang cotton production. By 2023, nearly 61% of fashion companies said they would no longer use China as their main supplier, a significant change compared with about a quarter of respondents before the epidemic. About 80% said they plan to purchase less clothing from China in the next two years.
Currently, Vietnam is the second largest supplier after China, followed by Bangladesh, India, Cambodia and Indonesia. OTEXA data shows that from January to April this year, China’s clothing exports to the United States fell by 32.45% compared with the same period last year, to US$4.52 billion. China is the world’s largest apparel supplier, and although Vietnam has benefited from the Sino-US standoff, Vietnam’s exports to the United States also dropped significantly by nearly 27.33% to US$4.37 billion compared with the same period last year.
Bangladesh and India feel the pressure
The United States is the second largest destination for Bangladesh’s readymade garments exports and as the current situation shows, Bangladesh is facing continued tough challenges in the readymade garments sector. According to OTEXA data, Bangladesh earned $4.09 billion from exports of ready-made garments to the United States between January and May 2022, but during the same period this year, revenue fell to $3.3 billion. Likewise, data from India is also negative. India’s garment exports to the United States dropped by 11.36% from US$4.78 billion in January-June 2022 to US$4.23 billion in January-June 2023.