The latest Just-Style State of Sourcing Survey conducted in December 2016 suggests a few trends of apparel sourcing in 2017:
- Exchange rate volatility and rising raw material and labor costs are among the top concerns for apparel sourcing in 2017. Around 69% of survey respondents expect overall sourcing costs to rise in 2017, compared with 54.5% in last year’s survey. The fluctuating exchange rate, buyer’s expectation for higher quality of products and complex compliance requirements are among the major factors driving up the sourcing cost.
- Apparel companies expect more uncertainties regarding the political and policy environment in 2017. Specific concerns for apparel companies include trade policy under Trump’s Administration, possible renegotiation of trade agreements such as the North American Free Trade Agreement (NAFTA) and Trump’s threats to impose a 45% punitive tariff on US textile and apparel imports from China. Respondents say the uncertainties make it challenging for companies to do strategic planning in advance
- Sourcing will play an increasingly important role helping companies achieve strategic goals. It is highly expected that sourcing can contribute to meeting the fast-evolving demands of omni-channel retailing, consumers’ expectations for a more convenient shopping experience, as well as greater product innovation across all sales channels. A few respondents say they will use process and productivity improvement and closer collaboration with key suppliers to try to achieve these goals and mitigate any sourcing cost increases.
- Sourcing destinations may continue to slightly adjust in 2017. Specifically, 72.1% of respondents say they are looking for alternative source of supply in 2017 compared with 69.2% last year. Popular emerging sourcing destinations include Central America and the United States, EU, UK, Vietnam, Bangladesh, Indonesia and Kenya. However, the survey also confirms that China‘s dominance as the top apparel supplier is unlikely to change anytime soon – with a rise in the number of respondents looking to increase orders from the country in the upcoming year.
Respondents of the survey include manufacturers (29%), importers, agents or sourcing office executives (23%), retailers (12%), fiber, yarn, or fabric suppliers (11%), consulting, research, government, trade institute, NGO and university fields (14%) and software suppliers (2.6%).
Full report of the survey is available HERE.
FASH455 Global Apparel & Textile Trade and Sourcing 
It wasn’t surprising to learn that apparel companies are uncertain regarding future sourcing. Under Trump’s Administration there are a lot of changes that will arise and still continue to be discussed. Decisions are difficult to make when our President has yet to make a sturdy choice on how our trading will continue and eventually/hopefully prosper. Will exports AND imports suffer? Will companies face financial losses and have to source differently? There are so many questions that emerge with these possible adjustments. I think it is compelling to think about what apparel companies will do because their industry is literally formed around planning. If they can’t plan a key component such as sourcing, what will this mean for their brands as an entity? The survey states that demands are getting high so with that being the case, decisions need to be made. I believe that this issue of taxation and sourcing should be finalized because there are countries whose success and goals depend upon such factors.
To go off Jaqlyn I also am not surprised that manufacturers and companies are so uncertain about what is going to happen in terms of taxation, imports and exports and overall costs. The political atmosphere currently is very intense and everyone is so unsure of what’s going to happen. It’s concerning that so many people feel this way and almost are in fear. I think searching for alternatives is a good thing to do but also I think the Trump administration needs to meet with the key people and discuss matters further. Everyone needs to be on a common ground and say their side before creating rules against globalization and or taxation costs.
It is only normal for apparel companies to be worried about the trade policy under Trump’s Administration. It must be very frightening and difficult for many companies to plan ahead for upcoming season with the uncertainty. I wonder how this lack of planning will affect the companies business in the future? How can an industry who relies so heavily on planning continue to move forward when Trump’s Administration has it at a stand still? I have to add that It’s not surprising that companies already plan to source from China as well as other leading suppliers such as Vietnam and Bangladesh. The number of respondents looking to increase orders from China in the upcoming year must be due to their low costs and timely production.
It is interesting to see how politics in the United States affect productivity in other countries. I was not surprised to learn that the uncertainties of the Trump Administration make it difficult for sourcing companies to do strategic planning. As we learned in class, NAFTA is a huge controversy no one can seem to agree on. Today, fast fashion is a growing phenomenon and strategic planning and trade is essential. The article claims, 69% of respondents expect overall sourcing costs to rise. What will this do to the fast fashion industry? The demand for a more convenient shopping experience is increasing, but if planning is not done efficiently due to uncertainty will the consumer suffer as a result?
With the Trump Administration making extreme changes to trade policies, it is no surprise that the textile and apparel industry is worried. The U.S. plays an integral role in the global market and our actions will tremendously effect other countries. In class we discussed the importance of NAFTA and the TPP and how there are so many implications and consequences that will follow with Trump’s decisions. The uncertainty, of course is going to put stress on the textile industry, as sourcing takes strategic planning in advance. If effective planning is put to a stop, how will the fast-paced industry cope with it’s increasingly demanding consumers?
Many of the survey respondents seem unsure about what the future has to hold. With the raw material and labor costs increasing, and the political climate the way it is, many people have the right to be worried about their jobs and the industry. If a couple sectors have rising costs, what does that mean for the rest of the industry?
I think the rising raw material and labor costs are going to prove to be a huge issue. Now companies will be forced to look for manufacturers with the lowest prices. In saying this, these factories will probably be highly dangerous for workers and unethical. The cheapest factories usually experience these issues. It is completely understandable that companies are afraid of the political future. Politics have gone through a major change and the Trump Administration has a lot of opposing opinions to the current ways of outsourcing and the textile industry as a whole. It comes to no surprise that sourcing will continue to grow. Companies know the huge expense that comes with manufacturing in the United States and the majority of consumers look at price first. Outsourcing needs some revisions to make it safer and more ethical, however I don’t see it going anywhere, anytime soon. Although, I did find it interesting that the locations of sourcing might be changing. China will still be on top, but companies are starting to look into different countries which I thought was very interesting.
It is interesting to see what will happen in the near future regarding the U.S. being a sourcing destination to the world under Trump’s administration. I personally am not surprised that companies are unsure of their import and export schedules in the near future. President Trump has threatened to impose a heavy tariff of 45% on imported goods into the U.S. from China, as well as his promise to renegotiate NAFTA.
This is especially concerning for U.S. apparel companies because many source some aspect of their garments or accessories from China. If Trump goes through with his agenda, will U.S. apparel companies continue to source their clothing from China, but will be required to raise their prices? Or do you think apparel companies will choose to source from other countries which do not have import tariffs?
U.S. plays a crucial role in the TPP and NAFTA trade policy globally. Trump’s decision could impact on T&A industries globally. As we know, he imposes a 45% punitive tariff on US textile and apparel from China because he wants to decrease the exports from China in order to increase the exports to Mexico, Canada and other North America’s countries. The most significant reason is he wants to enhance America’s manufacturing industries. In other words, the cost of apparel will be much higher and American consumers could not happy. Even trump wants to increase the domestic manufacturing industries, it still have new problems that he should be solve, such as American consumers do not have sufficient money to purchase it, if nobody purchases it, the manufacturing industry will be close.
Trump’s administration is extremely unpredictable, and this can cause a lot of uncertainty and stress for companies planning for upcoming seasons. The rising costs of labor and raw materials are going to become a huge issue as well. Companies will look for cheap factories and with cheap factories comes unethical working conditions and danger to workers. This caused stress on the factories and on the companies involved. The U.S. plays a huge part in the global market, and what we do affects other countries as well, which is something Trump needs to be careful of.
It’s clear that the U.S. has a huge influence on different parts of the supply chain, and with the current politics of today, no one is very sure of what the future holds. However, it is still important for the U.S. to do business with other countries, and despite threats for protectionary policies, it is unlikely that the T&A industry will stop sourcing largely from other countries.