Atradius looked at the trends for the textile industry this year. See how the US fares in terms of production, revenue and market growth, as well as challenges faced.
As autumn leaves fall and the Halloween spirit rises, we’re faced with a fashion dilemma: how to bundle up for chilly weather? The US textile industry has the answers, offering cozy costume couture and high-tech fabrics. Join us as we dive into the world of textiles! We reached out to Marjorie Weinberg, Senior Underwriter at Atradius, to get insights into the textile industry’s outlook.
United States is the world leader in textile research and development. Specifically, working on next generation textile materials such as conductive fabric with anti-static properties, electronic textiles that can monitor heart rate and other vital signs, antimicrobial fibers, lifesaving body armor, and new fabrics that adapt to the climate making the wearer warmer or cooler. The scale of the textile and clothing manufacturing industry in the U.S. has significantly decreased over the past few decades, owing to various factors like automation, import competition, and changing U.S. comparative advantages for related products. Nevertheless, American textile production is experiencing a gradual resurgence.
Revenue and Market Growth
According to the National Council of Textile Organization, in 2022 the value of U.S. textile and apparel shipments totaled $65.8 billion in 2022, up from $64 billion in 2021. The U.S. industry is the third largest exporter of textile-related products in the world. Fiber, textile, and apparel exports combined were $34.0 billion in 2022, up from $28.5 billion in 2021. The industry exports to over 200 countries, with 24 export markets each purchasing more than $100 million worth of products. In the first half of 2022, the United States exports of textiles and clothing increased by 13.10% from the previous year but fell by 4.52% to $13.832 billion in January-July 2023 compared to the same period in 2022. In global comparison, most apparel revenue is generated in the USA, with sales of $343.7 billion expected in 2023. The market is expected to grow annually by 1.96% over the next five years, though inflationary pressures and rising costs are expected to persist. The largest segment is Women’s Apparel with a market volume of $197 billion in 2023. A global recession in the fashion industry is anticipated in 2023, with inflation emerging as the primary concern.
Challenges Faced in 2023
This year, The US textile and apparel industry faced challenging macroeconomic conditions. The headwinds from global supply chain disruptions, inflation at home, rising material costs, and rising interest rates were strong. Consumer demand initially surged in the first half of the year but waned in the second half, as inflationary pressures transformed the economic landscape from one of excess demand and inadequate supply to one characterized by oversupply and insufficient demand.
Looking Ahead with Optimism
Despite these challenges in 2023, there were many positive trends that helped to offset some pressure including softening inflation towards the second half of the year, coupled with a surge in onshoring and nearshoring. This led to historic investments, commitments, and expansion in the US and the Western Hemisphere. The Western Hemisphere supply chain remained a key driver behind the industry’s growth and remains a vital economic engine for the textile and apparel sectors. The US textile industry remains globally competitive and over the last five years, the pace of investment has increased as foreign manufacturers turn to the US for protection. The U.S. textile industry’s fundamentals are robust, and its resilience during the COVID-19 pandemic instills confidence that it can withstand the perfect storm of inflation, supply chain disruptions, and rising costs.
Looking For a FREE Quote?
Obtaining a free Trade Credit Insurance quote or just some more information is fast and easy! Get in touch with us today.Get Started