Study: U.S. Apparel, Footwear Imports Show Shift

May 10, 2011

According to new data from The Journal of Commerce/PIERS, China's share of U.S. imports is declining in labor-intensive goods, such as footwear and apparel, and sourcing is shifting to other countries.

The data show a diversion in offshore sourcing of products for the United States to manufacturing centers in Southeast Asia and Central America.

China's share of footwear imports dropped from 75% in the first quarter of 2010 to 73% in the first quarter of 2011. China's share of U.S. menswear imports dropped from 25% to 22% in the first quarter of 2011 compared to the first quarter of 2010. In womenswear and infantwear, China's market share dropped from 34% to 31%.

China remains by far the largest supplier of containerized goods to the United States. During the first quarter, imports from China accounted for 45% of overall U.S. imports, a drop of one percentage point from the first quarter of 2010. The second-largest source country for container cargo in the first quarter was South Korea, at a 4% share, followed by Japan with a 3.7%, according to the journal.

In 2010, U.S. footwear imports from China rebounded by 11% over 2009, but the overall U.S. foreign demand for footwear grew 16% in 2010, with Vietnam and Indonesia as markets that saw higher rates of growth compared to China, indicating sourcing shifts to these markets.

In the case of menswear, sourcing division is favoring India, led by Bangladesh, and Central America, led by Honduras. Menswear imports from India and Central America were up by 22% and 57%, respectively, year to date (January 2011 through March 2011), while imports from China in the first quarter fell by 1%.

Regarding womenswear and infantwear, inbound shipments from China are clearly trending down as they increase from other sourcing markets. Imports globally dropped 5% in the first quarter of 2011, but declined 12% from China during this same period. Imports in this category from Southeast Asian nations, led by Vietnam and Cambodia, showed strong first quarter growth at a rate of 7%.

The data also illustrate a shift in production within China from the South China region to the north and interior regions, where goods exit the country via the Yangtze River and nearby ports such as Shanghai and Ningbo.

The strengthening of China's currency also is reducing already tight profit margins for manufacturers of low-value goods, such as footwear and apparel.

For more information, visit joc.com. — S.G.



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