Is the U.S. textile and apparel industry on the road to recovery? This paper examines recent trends to determine whether data on trade, production, employment, and investment reflect the narrative surrounding revitalization of the industry. For the textiles sector, such data show mixed evidence of an industry in recovery. Nevertheless, numerous accounts indicate that U.S. or foreign-owned textile firms may be investing in the United States either to increase existing domestic capacity or to add new manufacturing operations. In the apparel sector, evidence suggests that in recent years reshoring has taken place, albeit on a modest scale. This information comes from accounts from U.S. apparel brands and retailers and, to some extent, from data on capital expenditures and shipments. The paper discusses the driving forces behind investment in the domestic industry, as well as strategies that industry players are prioritizing in order to stimulate the industry and remain competitive.
Office of IndustriesU.S. International Trade CommissionWashington, DC 20436 USA
www.usitc.gov
Office of Industries U.S. International Trade Commission (USITC)September 2018
The authors are staff with the Office of Industries and Office of Economics of the U.S. International Trade Commission (USITC). Office of Industries working papers are the result of the ongoing professional research of USITC staff and solely represent the opinions and professional research of individual authors. These papers do not necessarily represent the views of the U.S. International Trade Commission or any of its individual Commissioners. Working papers are circulated to promote the active exchange of ideas between USITC staff and recognized experts outside the USITC, and to promote professional development of office staff by encouraging outside professional critique of staff research.
This paper represents solely the views of the authors and is not meant to represent the views of the U.S. International Trade Commission or any of its commissioners. Please direct all correspondence to Kimberlie Freund, Office of Industries, U.S. International Trade Commission, 500 E Street, SW, Washington, DC 20436, telephone: 202-708-5402, email: kimberlie.freund@usitc.gov.
September 2018No. ID-18055
Kimberlie Freund,kimberlie.freund@usitc.gov
Mary Roop,mary.roop@usitc.gov
Heidi Colby-Oizumi,heidi.colby-oizumi@usitc.gov
Trina Chambers, Gwenetta Duvall, and Monica Sanders
Judy Edelhoff and Peg Hausman
The authors would like to thank Pamela Davis for her assistance on this paper.
As manufacturing has become increasingly global, companies have numerous options for where to locate production. At one time, the United States boasted a large and robust textile and apparel industry. As with many U.S. manufacturing sectors, increased globalization and offshoring contributed to domestic production and employment declines. In particular, the phaseout of global textile and apparel quotas from 1995 to 2005 challenged U.S. apparel firms. The firms faced increased competition from lower-cost producers, which contributed to the longer-term consolidation of the industry. With sharply increased apparel imports, the U.S. textile sector’s downstream domestic apparel markets virtually disappeared. The progressive shift away from domestic production in the textiles and apparel sectors resulted in U.S. factory closures, an exodus of manufacturing jobs, severe contraction in the industry among both producers and suppliers, and increased reliance on imports to fulfill growing U.S. demand.
Recently, however, anecdotal information suggests an increase in new or expanded domestic manufacturing operations. Apparel manufacturers are seeing orders return to the United States, and there is some evidence of new investment in the sector. For textiles, there has been investment by U.S. firms—in order to increase existing domestic capacity or to start new manufacturing operations—as well as by foreign-owned textile firms. This paper first examines trends in the U.S. textile and apparel sectors to determine whether data on trade, production, employment, and investment reflect the narrative surrounding each sector’s revitalization. Second, it discusses the driving forces behind new investment and expansion of existing facilities, and provides highlights of some of the new investments. Finally, it points to certain strategies that firms and organizations are using to revitalize the textile and apparel sectors.
This discussion focuses first on the textile sector, followed by a discussion of the apparel sector. The textile sector, composed of fibers, yarns, and fabrics, is a key part of the apparel supply chain. Nonetheless, the domestic textile sector has increasingly focused on non-apparel markets, with end uses in construction, healthcare, logistics, manufacturing, automotive, and numerous other sectors. The apparel manufacturing sector (not to be confused with the broader apparel retail sector) manufactures garments through the cutting and sewing of pre-made fabric, as well as by knitting garment parts (or the entire garment) and assembling the parts into a finished garment.
Stories of revitalization in the textile sector abound. However, 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 $1.6 billion in 2013 to $2.1 billion in 2016, the latest year for which data are available (figure 1 and annex A, table A1). The 2016 level was also well above the pre-recessionary level in 2008 ($1.4 billion), suggesting that these sectors are seeing a resurgence. 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 U.S. textiles sector (a full list of the firms are shown in annex B). 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.
Total capital expenditures for structures and equipment for textile mills and textile product mills (NAICS 313 and 314), 2013–16
The U.S. market for textiles is supplied primarily by domestic shipments, accounting for 58–60 percent of the domestic market during the 2013–16 period. Despite evidence of new investment in the textiles sector, data on U.S. shipments show mixed results. After four years of moderate decline, U.S. textile shipments increased in 2017 to $39.6 billion, but remained 3 percent below the 2013 level (figure 2 and annex A, table A2). At $10.6 billion, U.S. textile exports in 2017 were also below the five-year high of $12.1 billion in 2014. Rather than simply increasing capacity, some of the new investment is likely replacing existing equipment, as firms upgrade and modernize 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 U.S. denim plant.
Textiles: U.S. imports for consumption, domestic exports, and domestic shipments, 2013–17
Any growth in investment or shipments is not reflected in employment data. Employment in the textiles sector declined by 4 percent from 131,000 in 2013 to an estimated 126,000 in 2017. Although statements by industry experts suggest the industry has invested in technology to increase labor productivity, official data on labor productivity for yarns and fabrics—which accounts for most of the employment in the textiles sector—show steady declines during 2013–16.
Although a resurgence in the domestic textile sector may not be manifest in the data, many domestic and foreign firms have commented on the attractiveness of producing domestically, and solid reasons companies might take a second look at the United States as a manufacturing base (see box 1 and annex B for additional information on specific examples). Advantages to producing in the United States include local and state incentives for investment, and the benefits afforded by free trade agreement (FTA) preferences that encourage the use of U.S.-produced inputs in downstream production in FTA partner countries. Other key factors are reportedly making a major difference with respect to textiles production, particularly in the yarn subsector; these include access to reliable and competitively priced energy in the United States compared to that of other major producing countries, and access to high-quality, competitively priced cotton.
Box 1.
http://www.keeramerica.com/
http://www.gildancorp.com/yarn-spinning
http://mogulsb.com/en/company/locations
https://www.uniquetex.com/about
Energy costs are an important consideration in deciding where to locate energy-intensive textile production. Low U.S. energy costs are considered a competitive advantage for the domestic industry, particularly in the Southeast, where industrial rates in some states are lower than the national average. According to the International Textile Machinery Federation (ITMF), on average, the cost of electric power to manufacture one kilogram of rotor yarn in the United States in 2016 was $0.08, compared with $0.17, $0.14, and $0.13 in China, South Korea, and India, respectively. As a result, despite significantly higher labor costs in the United States (see “Automation for Greater Efficiency” below), the total cost to spin one kilogram of cotton yarn in the United States was lower than that for China, India, and South Korea. Keer America Corp., a Chinese textile producer that has invested in cotton yarn production in the United States, stated that electricity prices are as much as 40 percent lower in Lancaster County, South Carolina, than in Hangzhou, China, and thus were a contributing factor in its decision to invest in the United States.
The availability and reliability of high-quality cotton is also a factor influencing investment in the cotton yarn sector in the United States. For example, the Chinese firm Shandong Ruyi is investing in a new cotton yarn production facility in Arkansas that is expected to use 200,000 tons of locally grown cotton annually. In 2017, the United States was the third-largest producer of cotton after China and India. Cotton grown in the United States is known for its consistent quality and reliability thanks in large measure to the USDA’s cotton grading system. Moreover, U.S. farmers and distributors have established reputations for honoring their cotton contracts, which reportedly has been a challenge in the past with countries such as China.
State and other local government incentives are another important factor in attracting new investment in textiles, especially by foreign firms. South Carolina, North Carolina, Georgia, and Arkansas, in particular, have provided substantial financial incentives including tax credits, training assistance, and help with infrastructure development, among other incentives. For example, the state of Georgia’s Department of Economic Development offers tax credits to encourage positive economic business practices such as the creation of high-paying jobs and the increase of trade through Georgia’s ports. The state also offers tax exemptions, small business incentives, and financial assistance to new investors, as well as workforce initiatives, such as Quick Start, offered through the Technical College System of Georgia.
North Carolina, too, offers numerous incentives. One example is the $3 million Job Development Investment Grant (JDIG) awarded to Everest Textile, a Taiwanese textile company, as part of its investment in the construction of a new textiles factory that will weave, dye, and finish nonwoven fabrics for high-performance sportswear. The grant is contingent upon the company’s ability to meet job creation and investment goals over a 12-year period. Similarly, Shri Govindaraja Textiles, an Indian textile manufacturer with a facility in Eden, North Carolina, reported touring nine different U.S. states before choosing North Carolina. That state awarded the company a $750,000 Community Development Block Grant to assist with initial building maintenance costs.
The state governments of Arkansas and South Carolina offer similar incentives. For example, Shandong Ruyi Technology Group, a textile manufacturer with the potential to create 800 new jobs, received up to $4 million in grants (contingent upon job creation), cash rebates equal to 5 percent of the total payroll associated with new jobs for 10 years, and sales tax refunds on building materials associated with the investment. In South Carolina, to encourage China-based Suzhou Glacier Import & Export Company’s $24 million investment in a manufacturing facility in the state, the state Coordinating Council for Economic Development approved job development credits that allowed the company to obtain a refund to use for approved business expenditures.
Another factor influencing production decisions and reshoring that is important to the textiles sector is free trade agreements (FTAs), specifically the rules of origin of such agreements. The United States currently has bilateral or multilateral FTAs in place with Australia, Bahrain, Canada, Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Israel, Jordan, South Korea, Mexico, Morocco, Nicaragua, Oman, Panama, Peru, and Singapore. Duty-free access for apparel items under these agreements is spelled out in the rules of origin of the agreement.
In most cases duty-free access to the U.S. market for apparel items is tied to the origin of the yarns and fabrics used in production. Most U.S. FTAs include a “yarn forward” rule of origin, which dictates that all yarn and fabric used to produce apparel in an FTA partner country must come from either the United States or the partner country. Such conditions are designed to encourage production of yarns and fabrics in the United States or the partner country; therefore, they are an inducement in the maintenance and/or expansion of U.S. textile manufacturing. The impact of the “yarn forward” rule of origin is especially apparent in U.S. exports to Western Hemisphere FTA partners, which accounted for 74 percent of the total value of U.S. textile exports in 2017.
Aside from the external factors discussed above, U.S. textile producers are making internal changes to maintain and build their competitiveness, enhancing the attractiveness of the United States as a manufacturing location. The industry is investing in new technology to improve efficiencies in order to supply the latest innovations that will maintain and grow domestic and global market share. As stated by one U.S. specialty yarn producer, “We must innovate to survive”; and according to this producer, the domestic industry’s knowledge and expertise is its “biggest advantage over textile companies from other parts of the world.”
Innovation is an important part of the textile sector’s competitiveness strategy: the sector must both develop new products to stay ahead of the competition and diversify in order to enter new markets. Research and development occurs in all stages of the supply chain, from the manufacturing of fibers and yarns to woven and knit fabrics, nonwovens, and finished goods. Innovation in the industry feeds into every downstream market, including the traditional apparel, military, medical, infrastructure, landscaping, transportation, and industrial markets. Patents and trademarks are important for this industry, and innovation, coupled with branding, is one of the ways the industry tries to differentiate itself from overseas competitors. For example, Milliken & Company states it has one of the largest textile research facilities in the world and boasts over 2,200 U.S. patents. The importance of branding can be seen with the Sunbrella line of fabrics made by Glen Raven and the Polartec line of fabrics made by Polartec, both of which are now household names.
Many specific examples illustrate the pursuit of innovation in the domestic textile sector. American & Efird, a global industrial and consumer thread company is collaborating with Applied DNA Sciences to develop a new anti-counterfeiting sewing thread. Other examples of textiles that go beyond the traditional markets include Milliken’s ResQTM fabric for the military and fire and rescue services sectors, which self-extinguishes when removed from a flame, and Glen Raven’s GlenFlow, a water-filtration fabric that removes salt from seawater. These and other U.S. firms use their research and manufacturing capabilities to work closely with end users to develop new products. For example, Highland Industries has worked with the military and the National Air and Space Administration (NASA) to design heat shields for rockets, as well as with the global food industry to develop lightweight, readily sterilized, and flexible “bladders” to transport liquids.
Targeted innovation in the textile sector occurs across disciplines and organizations. The Advanced Functional Fabrics of America (AFFOA) initiative is a notable example of a collaborative effort between government, industry, academia, and nonprofit organizations. AFFOA’s purpose is to integrate technologies—from fibers and yarns to integrated circuits, solar cells, light-emitting diodes (LEDs), and other capabilities—in order to create textiles that can “see, hear, sense, communicate, store energy, regulate temperature, monitor health, change color, and more.” For example, one team formed under the auspices of AFFOA created “sensing fabrics” that can monitor strain or detect cracks in the integrity of infrastructure when applied to buildings, roadways, bridges, dams, and pipelines.
Diversification is another strategy that textile producers are using to remain competitive. Many firms have diversified production into different products and/or markets in order to expand their market opportunities or transition into new businesses. The president of Champion Thread, a domestic producer of industrial sewing thread, stated that several capital investment projects in 2018 will “further enhance our ability . . . to diversify our product mix into new markets.” Similarly, National Spinning Company, a domestic yarn producer since 1921, has diversified into nonwoven fabrics production for the automotive, home appliance, construction, bedding, and other markets. In 2016, it opened a new nonwoven fabric plant in South Carolina. Polartec (formerly Malden Mills) invented the first synthetic fleece that was used by an outdoor apparel company, Patagonia, in 1981. Since then, Polartec has expanded its product line to include insulating, protective, and flame-resistant textiles for the active, work, military, and athleisure markets.
Some firms in the industry have also diversified by manufacturing downstream products to provide a full service product to their customers. Kentwool Manufacturing, for example, a domestic producer of wool yarn, has expanded its product offerings to include wool golf socks and men’s briefs and loungewear. The company partners with other domestic firms, such as Wigwam, to have socks made under the “Kentwool” name.
Automation plays a critical role in the competitiveness of the textile industry. The industry’s continued efforts to maintain a competitive advantage using automation are particularly evident in in its investment in new machinery for open-end spinning. According to the International Textile Manufacturers Federation (ITMF), nearly one-half of all open-end rotors installed in the United States in 2015 were less than nine years old, compared with 27 percent in 2013. In comparison, while this figure was only 28 percent for India in 2015, in China it was 79 percent. The large share of open-end rotors installed in China in the last nine years shows why other factors, in addition to investment in new machinery, such as innovation, service and quality, are so important to the competitiveness of the U.S. textile industry.
In addition to investing in machinery that operates more efficiently, the U.S. textile industry has worked to minimize labor costs. Wages are significantly higher in the United States than in many textile-producing countries, although automation in the industry has helped level the playing field. In 2016, the average hourly wages for skilled and unskilled personnel in U.S. cotton yarn spinning were $18.10 and $12.05, respectively; in China, they were $2.45 and $1.83, respectively. Although these labor cost differences are considerable, U.S. firms have been able to reduce costs by incorporating automation into traditionally labor-intensive tasks such as quality control, especially in fabric inspection, and other non-value-added areas, including basic packaging, material handling, and inventory tracking. In addition, integrating digital connectivity at the manufacturing level allows for greater transparency and control of the production process. For example, digital technologies applied to textile machinery can detect flaws in textile production and notify an operator to correct the defect before its incorporation into the final product.
There is some evidence to suggest that reshoring has taken place in recent years in the apparel sector, although on a modest scale. This impression is supported not only by accounts from U.S. apparel brands and retailers, but also to some extent by data on capital expenditures and shipments. For the 2013–16 period, capital expenditures were up 5 percent to $301 million (figure 3, annex A, table A1). Recent reports on new investment also suggest capital investment in the apparel sector may be increasing, as the industry begins to adopt more labor-saving technologies. Although domestic shipments of apparel reached a record low of $11.5 billion in 2014 and remained at that low level in 2015, they showed modest increases the following two years, reaching $12.0 billion in 2016 and $12.5 billion in 2017 (figure 4, annex A, table A3)—the first positive trend since 1998. The American Apparel & Footwear Association (AAFA) estimates that the domestic industry produced 603.8 million garments in 2016, representing 2.8 percent of total apparel consumed in the United States in 2016. This total was up from an all-time low of 2.0 percent in 2010.
Any evidence of an uptick in the apparel sector, however, is not reflected in employment data. Employment in the apparel sector steadily declined during 2013–17, down 21 percent from 145,000 workers in 2013 to 120,000 workers in 2017. Official data on labor productivity also showed steady declines during 2013–16.
Source: USITC DataWeb/USDOC (accessed February 20, 2018); U.S. Census Bureau, Manufacturer’s Shipments, Inventories, and Orders, http://www.census.gov/econ/currentdata (accessed February 16, 2018).
Industry survey data suggest that U.S. fashion companies will continue to source apparel from the United States, although increases in new domestic sourcing may be slowing and the amount sourced domestically on average is relatively small. A 2017 United States Fashion Industry Association (USFIA) benchmarking study revealed that 61 percent of survey respondents indicated that they sourced at least some goods from the United States, with most sourcing 10 percent or less of their total volume/value in the United States. The benchmarking study also indicated that 21 percent of respondents would increase sourcing from the United States in the next two years, compared with 10 percent of respondents who indicated they might reduce sourcing in the United States.
However, the 2017 survey results were less promising for U.S. industry than the results in 2014, when 82 percent of retailers and 55 percent of U.S. importers/wholesalers indicated they would increase sourcing from the United States in the next two years. This drop suggests that any major increases in domestic sourcing may have already taken place and further increases may be smaller. A 2017 survey conducted by McKinsey and Company indicated a slightly more optimistic view on reshoring in the apparel sector: more than one-third of chief purchasing officers in the apparel industry predicted a greater use of reshoring by their companies.
Most reshoring by the apparel sector does not appear to reflect a large-scale movement of production from one country back to the United States. Instead, reshoring has been part of a strategic realignment of many firms’ overall supply chains. Domestic production can be part of a firm’s strategy to reduce supply chain risk. According to a 2014 USFIA benchmarking study, companies that source from a diverse group of countries were “more likely to commit to sourcing in the United States as part of their overall strategy to diversify sourcing,” rather than cutting back on imports.
China is still the largest source of all apparel sold in the U.S. market, accounting for 41.9 percent of the quantity of U.S. apparel imports in 2017. Nevertheless, rising costs in China have led many firms to reassess their global sourcing strategies. While the cost of U.S. production is still significantly higher than that of China, when combined with other factors, sourcing domestically may be competitive for some products. This applies particularly to products that require customization, have shorter lead times, are luxury items, and/or are capable of being produced using high levels of automation. New and developing technology that allows for more automation of the apparel production process will also make production in the United States more cost-competitive with offshore production. For example, the “Sewbot” technology developed by Softwear Automation Inc. allows machines to replace much of the labor-intensive sewing process (see “Role of Technology” below).
Numerous reports indicate that brands are increasing their U.S. sourcing and that manufacturing firms are reshoring or starting new production in the United States (box 2). Among the reasons given for producing in the United States are improved lead times, better quality control, and more flexible production. For products with frequent, short selling seasons, it makes sense to produce closer to market, including within the United States. The number of retail apparel sales seasons has increased from a traditional 2 main seasons, to 6–12 seasons (or up to 26 seasons for some fast-fashion brands). Such frequent change—and within shortened time periods—means that quick service and turnaround times are important for brands and manufacturers. In addition, the role of e-commerce and a more demanding consumer is pushing fashion into both increased customization and faster turnaround times. As stated by the president of the , “As the need for speed continues to become more important, nearshoring and onshoring is going to be become more relevant.”
Shorter lead times are also important because retailers and apparel brands prefer to finalize purchase orders later in the development process to improve forecasting and reduce errors that lead to markdowns or shortages. An official from Under Armour said the gap between projected and actual demand is often too wide to safely place orders six months in advance. Boathouse Sports, a designer and manufacturer of performance apparel, reshored production from China largely to shorten lead times; orders from China required at least six months lead time, whereas U.S. factory orders required less than one month from order to ship date.
Along with more frequent orders, as discussed above, order sizes are often smaller as well and U.S. production can fill a gap by handling orders that are too small for overseas production. Small orders may be used to test the market, with the option to reorder or adjust the product as needed. Start-ups and firms that have more customized business may also have smaller orders. Boathouse Sports, for example, stated that it has an average order of just 17 garments. Ziel, Inc., which caters to firms that custom-order activewear apparel in the United States, requires no minimum order size at all.
Many domestically made products use “Made in USA” branding to capitalize on the buy-American trend and the appeal of “Made in USA.” Some reasons for purchasing domestically produced apparel include perception of quality, contribution to job creation and the overall U.S. economy, supply-chain transparency, environmental stewardship, and workplace conditions. The variety of clothing brands that use “Made in USA” labeling as part of their brand identity range from producers of work clothes and uniforms to denim and contemporary fashion. Online vendors and independent organizations make it easier for consumers to find clothing made in the United States through websites such as “Still Made in the USA” and “American Made Clothing Directory.”
Despite the modest uptick in U.S. production, there are still obstacles to manufacturing apparel in the United States. Labor costs and availability are major concerns for those looking to manufacture in or source from the United States. As a result, automation is important throughout all stages of manufacturing—including designing, cutting, sewing, and moving the product during production process—to help improve production efficiency, minimize labor requirements, and reduce costs. Automation can take the place of many individual processes required in the completion of a garment, such as an “autonomous pocket setter” in which a pocket is sewn onto a piece of a garment without being touched by human hands. The technology not only helps reduce the cost, but it also helps reduce the need for skilled sewing operators, for which there is a shortage in the United States.
Automation can also play a much larger role in the manufacturing process. As highlighted earlier, one notable example is Tianyuan Garments Company, which plans to open a $20 million garment factory in Little Rock, Arkansas, by the end of 2018. Its factory will use 330 machines from Georgia-based Softwear Automation, which combine fabric visualization technology and robotics (“Sewbots”) to control fabric during the sewing process. The factory will be capable of making 23 million T-shirts per year at a cost of about 33 cents per shirt.
Automated sewing has not been widely adopted, however, because fabric is difficult to control during the sewing process. Seattle-based Sewbo is addressing that challenge by adding a water-soluble stiffener to the fabric, improving the ability to control fabric as it is moved through the stages of the automated sewing process. A garment that is stiffened in this way can be sewn by standard machines and handled like “sheet metal.” The stiffener can be rinsed from the hardened fabric, rendering the garment soft and ready-to-wear, while the stiffener itself can be reused. Although there are challenges to translating the technology to more complex apparel, Softwear Automation reportedly would like to apply the technology to make jeans, uniforms, and dress shirts.
Technology is also helping domestic firms meet the need for on-demand and customized orders. Nimbly and On Point Manufacturing (OPM) are two domestic apparel firms that use technology to allow them to produce customized orders in the United States on a quick-turnaround basis. Nimbly uses a 3-D whole-garment knitting process to produce custom-knit garments in 30 minutes or less. According to OPM, it “automates and integrates almost every piece of the process from order entry to delivery yet keeps the fine skills of the seamstresses.” It states it can produce any number of garments and any size, with a goal to ship directly to the customer in 72 hours. Taylar Leigh Apparel, an online women’s apparel brand that has contracted with OPM to makes its clothing, highlights its custom-made apparel that is produced to order. A key aspect of OPM is its software system, developed by partner firm, “Purchase Activated Apparel Technologies (PAAT), which is developing a “global technology network” to “connect apparel software development programs, manufacturing systems, and related value-added applications.” Separately, Amazon has recently received a patent for an on-demand apparel manufacturing system, which, if implemented, automates most of the production process. A customer order is automatically translated to a cutting pattern on fabric or other material, which is then cut and transferred to a sewing station, inspected, and packaged for delivery. The sewing is either automated or done by an attendant.
The industry is also adopting technology to accelerate the process of product development and to improve the fit of the final product. Li & Fung, for example, is using 3-D virtual sampling and fitting to speed up the product development process from four to six weeks to four to six days. The use of 3-D virtual prototyping helps to speed up the product development process by eliminating the need to produce as many samples and to improve the fit of the garment. As online sales grow, the importance of correct fit becomes increasingly important because consumers do not have the opportunity to try garments on before buying them.
Increased demand for customization and shorter lead times has made digitization and connectivity a critical tool to help speed the design, planning, production, and delivery of products. Digitization and connectivity can improve the efficiencies within and between each stage of the product design and manufacturing process. For example, one U.S. company developed a software that documents broken needles in cut-and-sew apparel machinery. Over time, this program identifies machines that have systematic problems allowing operators to preemptively resolve malfunctions. Industry representatives state that efficiencies created by improved communication technologies are essential to the future of the industry’s competitiveness. Nevertheless, even with the shortage of skilled labor, the domestic apparel industry is lagging behind other sewn product industries in manufacturing automation, in large part because it is not always cost effective due to intense competition from imported products.
In addition to actions taken by firms to improve their competiveness, a number of local groups are helping to promote fashion design and clothing production in United States. Industry groups can help smaller businesses to connect with the necessary resources for all parts of the production process; in addition, they help them attract clients, improve business processes, and develop talent to prepare local workforces with the skills required by the industry. They can also serve as a venue for sharing best practices and developing innovative ideas.
There are a number of examples of local initiatives to support apparel manufacturing in the United States. In New York, the Brooklyn Fashion + Design Accelerator (BF + DA), established in 2013, gives designers access to mentoring, small-run apparel production, knitting services, digital fabrication services, showroom space, and retail sites. In another example, the Manufacturing Solutions Center is a not-for-profit center that is part of the North Carolina University System and helps businesses in a large variety of ways, including start up help for entrepreneurs, helping with product development, prototyping, testing, training, and consulting to help improve factory efficiencies. Its goal is to promote jobs in the United States. It is also a member of the Carolina Textile District, which is a network of companies with designers, patternmakers, printers, fabric suppliers and manufacturers, tag and label providers, and cut-and-sew facilities. The Carolina Textile District offers a number of services to help startup companies, existing companies getting ready to launch a new product, and firms looking to manufacture domestically. Other examples include local initiatives in Saint Louis and Detroit. Saint Louis Fashion Fund was established to grow the fashion industry through the creation of new companies in downtown St. Louis. Among other things, the fund supports a fashion incubator and internships. Detroit, too, offers some initiatives to assist and develop the garment industry (box 3).
Box 3.
http://www.detroitgarmentgroup.org/about
“Made in America is back, and it’s likely to stay” according to a 2016 article by the National Council of Textile Organizations. The industry is still optimistic in 2018, stating “Thanks to productivity, flexibility, and innovation, the U.S. textile industry has cemented its position in the global market.” There are reasons for optimism in the apparel industry, too. According to the Reshoring Initiative, apparel ranks sixth among industries that have reshored jobs since 2010. After years of decline, the domestic apparel sector has seen recent growth in both new investment and shipments.
It is true that the vast majority of the U.S. apparel market is still supplied by imports, a trend that is likely to continue in the foreseeable future. In the textile sector, official data on shipments and investment show mixed results—shipments were up in 2017, but remained below 2013 levels. Nevertheless, investment levels in the United States were up, and numerous accounts speak of new investment in the sector by both U.S. and foreign firms. Both the textiles and apparel sectors point to innovation as a key part of their strategies for success. Innovation is vital for the development of new products, as well as for upgrading existing products, reducing costs, and improving flexibility in manufacturing operations.
Based on this research, there are a number of areas that might warrant further exploration. As much of the new investment in the industry is not yet operational, the authors believe it would be useful to revisit data on trade and production in the next three years, to see if the trends show further growth in the industry. It might also be useful to look at other downstream sectors, such as home furnishings and footwear, to see if they show similar trends. Finally, opportunities for future research may include a more in-depth analysis of the role e-commerce plays in the textile-apparel value chain, particularly how it affects production in the United States, as well as “near-shoring” production of finished goods in the Western Hemisphere for the U.S. market.
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Table A1. Total capital expenditures for structures and equipment, 2013–16 (millions of dollars)
2013
2014
2015
2016
Textile Mills and Textile Product Mills
1,558.0
1,798.0
1,678.0
2,123.0
Apparel Manufacturing
287.0
248.0
282.0
301.0
Source: U.S. Census Bureau, Annual Capital Expenditures Survey, "Capital Expenditures for Structures and Equipment for Companies with Employees by Industry," 2013–16.
Note: Includes data for NAICS 313 and 314 (Textile Mills and Textile Product Mills) and NAICS 314 (Apparel).
Table A2. Textiles: U.S. imports for consumption, domestic exports, and domestic shipments, 2012–16 (billions of dollars)
2013
2014
2015
2016
2017
Imports
10.5
10.9
11.0
10.4
10.4
Exports
11.8
12.1
11.4
10.5
10.6
Shipments
41.0
40.7
39.0
37.9
39.6
Source: USITC DataWeb/USDOC (accessed February 20, 2018); U.S. Census Bureau, Manufacturers’ Shipments, Inventories, and Orders, (accessed February 16, 2018); USDOC, U.S. Census Bureau, Annual Survey of Manufacturers (ASM). Data for NAICS 32522 estimated by USITC for 2017.
Note: Includes data for NAICS 313 (Textile Mills) and NAICS 32522 (Artificial and Synthetic Fibers and Filaments).
Table A3. Apparel: U.S. imports for consumption, domestic exports, and domestic shipments, 2012–16 (billions of dollars)
2013
2014
2015
2016
2017
Imports
83.8
86.3
89.3
84.3
84.2
Exports
3.2
3.2
3.1
2.9
2.8
Shipments
12.1
11.5
11.5
12.0
12.5
USITC DataWeb/USDOC (accessed February 20, 201); U.S. Census Bureau, Manufacturers’ Shipments, Inventories and Orders (accessed February 16, 2018).
Note: Includes data for NAICS 314 (Apparel).
Annex B. Examples of Investment in the Production of Textiles and Textile Articles in the United States
Table B1. Examples of Investment in the Production of Textiles and Textile Articles in the United States, 2014–17
Firm
Product
Investment (millions $)
New Jobs
State
Country
Hamrick Mills, Inc.
Woven fabrics
6
*
SC
United States
Parkdale Inc.
Cotton yarn
145
*
TN
United States
WTP Corp.
Nonwovens
6
40
KY
United States
Thrace-LINQ (Thrace Group)
Nonwovens
9
*
SC
Greece
Fiber Industries LLC
Polyester stable fiber
30
135
SC
United States
Fibertex Personal Care A/S
Nonwovens
60
145
NC
Denmark
HPFabrics, Inc.
Upholstery fabric
1
260
NC
Turkey
Bouckaert Industrial Textiles
Nonwovens
3
15
RI
United States
USFibers
Recycled polyester fiber
*
20
SC
United States
Oxco, Inc.
Nonwovens
13
130
SC
United States
Parkdale Inc.
Cotton yarn
145
80
TN
United States
Keer America (Keer Group)
Cotton yarn
300
SC
China
Mogul Co., Ltd.
Nonwovens
18
40
SC
Turkey
Frontier Spinning Mills, Inc.
Cotton and cotton-blend yarns
6
18
AL
United States
INVISTA
Nylon fiber
65
*
SC
United States
Trelleborg AB
Coated fabrics
11
76
NC
Sweden
Shandong Ruyi Technology Group, Ltd.
Cotton yarn
410
400 (initial)800 (potential)
AR
China
Shaw Industries Group, Inc.
Carpet yarn
42
75
TN
United States
Norafin Industries GmbH
Fire- and heat- retardant fabrics
18
46
NC
Germany
Lenzing AG
Artifical fiber (Lyocell)
293
163
AL
Austria
King Charles industries, Ltd.
Knit fabrics
13
100
NC
JV (United States/Taiwan)
Labon Technical Fiber
Technical fibers
3
23
SC
China
Fitesa Simpsonville, Inc.
Nonwovens
52
38
SC
Brazil
Tenowo Nonwovens (part of Hoftex Group)
Multiknit technology (for car seating)
13
*
NC
Germany
Carolina Nonwovens, LLC (subsidiary of National Spinning Co.)
Nonwovens
*
35
NC
United States
Carver Non-Woven Technologies LLC (subsidiary of R3 Composites Inc.)
Nonwovens
13
*
IN
United States
Custom Synthetic Fibers LLC
Recycled polyester staple fibers
6
50
AL
United States
Meridian Specialty Yarn Group Inc. (a division of Meridian Industries, Inc.)
Yarn dyeing
8
25
NC
United States
Uniquetex LLC
Nonwovens
32
150
NC
China
Everest Textile Co. Ltd. (Everest Textile USA)
Performance outerwear woven fabrics
19
610
NC
Taiwan
Suzhou Glacier Import & Export Co. Ltd.
Fabric for automobile interiors
24
109
SC
China
Huesker Inc. (subsidiary of HUESKER Synthetic GmbH)
Geosynthetics
9
20
NC
Germany
Auriga Polymers, Inc. (subsidiary of Indorama Ventures)
Polyester staple fiber
35
*
SC
Thailand
Aurora Specialty Textiles Group, Inc. (a division of Meridian Industries, Inc.)
Finishing, coating, and dyeing
*
5
IL
United States
Avgol Ltd.
Nonwovens
40
50
NC
Israel
Aquafil USA (Gruppo Bonazzi)
Carpet fibers
*
GA
Italy
Shaw Industries Group, Inc.
Carpet fibers
45
50
SC
United States
Suominen Corporation
Nonwovens
55
25
SC
Finland
DAK Americas (subsidiary of Alpek S.A. de C.V)
Polyester staple fiber
*
86
MS
Mexico
Shalag Nonwovens
Nonwovens
16
40
NC
Israel
National Spinning Co., Inc.
Yarn, nonwovens, consumer craft items
2
50
NC
United States
Sandler Nonwoven Corp. (Sandler AG)
Nonwovens
30
140
GA
Germany
AR Textiles (Sunflag)
Cotton yarn
12
38
NC
India
International Textile Group, Inc. (ITG)
Textile
2
10
NC
United States
DAK Americas (subsidiary of Alpek S.A. de C.V)
Polyester staple fiber
24
58
SC
Mexico
PolyTech Fibers, LLC
Recycled polyester staple fibers
12
114
GA
United States
Keer Group
Cotton yarn
218
500
SC
China
Shri Govindaraja Textiles Pvt Ltd. (SGT)
Cotton yarn
40
84
NC
India
Gildan Activewear, Inc.
Cotton yarn
200
500
NC
Canada
Glen Raven, Inc.
Awning, marine, and upholstery fabrics
14
10
SC
United States
Highland Industries, Inc.
Tubular and flat braids, woven tapes and fabric of carbon, glass, aramid, polyester and other polymeric yarns
8
29
NC
United States
Mattex Group
Carpet backing
60
200
GA
Saudi Arabia
Monterey Mills (Glenoit)
Sliver knit fabric (for paint rolls)
0
*
NC
United States
Martex Fiber Southern Corp.
Reclaimed fibers
*
*
SC
United States
Unifi, Inc.
Recycled polyester fiber
5
10
NC
United States
Polymer Group, Inc. (PGI)
Nonwovens
8
20
VA
United States
CT Nassau
Mattress tape and mattress ticking fabric
4
*
NC
United States
Culp, Inc.
Mattress fabric
10
*
United States
Auburn Manufacturing, Inc.
Textile products for extreme temperature industrial applications
*
1.4
ME
United States
Sources: Compiled by Commission staff from public sources, including company websites, news releases, and public press articles.
Note: Information in this table is based on publicly available information that may not reflect actual circumstances. The table is not inclusive of all investments made in the textiles and apparel sector, particularly those investments that were not publicly announced.