State of U.S. Textile and Apparel Manufacturing: Output, Employment, and Trade (Updated March 2021)

Textile and apparel manufacturing in the U.S. has significantly shrunk in size over the past decades due to multiple factors ranging from automation, import competition to the shifting U.S. comparative advantages for related products. However, U.S. textile manufacturing is gradually coming back. The output of U.S. textile manufacturing (measured by value added) totaled $18.79 billion in 2019, up 23.8% from 2009. In comparison, U.S. apparel manufacturing dropped to $9.5 billion in 2019, 4.4% lower than ten years ago (Bureau of Economic Analysis, 2021).

Meanwhile, like many other sectors, U.S. textile and apparel production was hit hard by COVID-19 in the first half of 2020 but started to recover since the 3rd quarter. Notably, as of September 2020, U.S. textile production had resumed about 90% of its production capacity at the pre-COVID level. The value of U.S. apparel production in 2020Q3 was even 2.2% higher than in 2019Q3.

On the other hand, as the U.S. economy is turning more mature and sophisticated, the share of U.S. textile and apparel manufacturing in the U.S. Gross Domestic Product (GDP) dropped to only 0.12% in 2020 (Q1-Q3) from 0.57% in 1998 (Bureau of Economic Analysis, 2021).

The U.S. textile and apparel manufacturing is changing in nature. For example, textile products had accounted for over 66% of the total output of the U.S. textile and apparel industry as of 2019, up from only 58% in 1998 (Bureau of Economic Analysis, 2020). Textiles and apparel “Made in the USA” are growing particularly fast in some product categories that are high-tech driven, such as medical textiles, protective clothing, specialty and industrial fabrics, and non-woven. These products are also becoming the new growth engine of U.S. textile exports. Notably, “special fabrics and yarns” had accounted for more than 34% of U.S. textile exports in 2019, up from only 20% in 2010 (Data source: UNComtrade, 2021).

Compatible with the production patterns, employment in the U.S. textile industry (NAICS 313 and 314) and apparel industry (NAICS 315) fell to the bottom in April-May 2020 due to COVID-19 but started to recover steadily since June 2020. From January 2020 to January 2021, the total employment in the two sectors decreased by 8.6% and 13.2%, respectively. However, to be noted, as production turns more automated and thanks to improved productivity (i.e., the value of output per worker), U.S. textile and apparel factories have been hiring fewer workers even before the pandemic. The downward trend in employment is not changing for the U.S. textile and apparel manufacturing sector.  Related, how to attract the new generation of workforce to the factory floor remains a crucial challenge facing the future of textile and apparel “Made in the USA.”

International trade supports textiles and apparel “Made in the USA.” Notably, nearly 40% of textiles “Made in the USA” (NAICS 313 and 314) were sold overseas in 2019, up from only 15% in 2000. A recent study further shows that product category and the size of the firm were both statistically significant factors that affected the U.S. textile and apparel manufacturer’s likelihood of engaged in exports.

from Nordstrom Rack

It is not rare to find clothing labeled “made in the USA with imported fabric” or “made in the USA with imported material” in the stores. Statistical analysis shows a strong correlation between the value of U.S. apparel output and U.S. yarn and fabric imports from 1998 to 2019.

Like many other developed economies whose textile and apparel industries had reached the stage of post-maturity, the United States today is a net textile exporter and net apparel importer. COVID-19 has affected U.S. textile and apparel trade in several important ways:

  • Trade volume cut: Both affected by the shrinkage of import demand and supply chain disruptions, the value of U.S. textile and apparel imports dropped by as much as 19.3% in 2020 from a year ago, particularly apparel items (down 23.5%). Likewise, the value of U.S. textile and apparel exports in 2020 decreased by 15.6%, including an unprecedented 26% decrease in yarn exports.
  • Trade balance shifted: Before the pandemic, U.S. was a net exporter of fabrics. However, as the import demand for non-woven fabrics (for making PPE purposes) surged during the pandemic, U.S. ran a trade deficit of $502 million for fabrics in 2020. Meanwhile, as retail sales slowed and imports dropped during the pandemic, the U.S. trade deficit in apparel shrank by 19% in 2020 compared with 2019.However, the shrinkage of the trade deficit did not boost clothing “Made in the USA” in 2020, reminding us that the trade balance often is not an adequate indicator to measure the economic impact of trade.
  • No change in export market: Close to 70% of U.S. textile and apparel export went to the Western Hemisphere in 2020, a pattern that has stayed stable over the past decades (OTEXA, 2021). More can be done to strengthen the Western Hemisphere supply chain and textile and apparel production in the region by leveraging regional trade agreements like CAFTA-DR and USMCA.

By Sheng Lu

Author: Sheng Lu

Professor @ University of Delaware

6 thoughts on “State of U.S. Textile and Apparel Manufacturing: Output, Employment, and Trade (Updated March 2021)”

  1. With 70% of American Trade only happening with countries in Western Hemisphere for fabrics, one thing that I was curious about was whether American fashion companies should look back eastward to expand their trade and slowly move away from China. With US-China relationships becoming more and more icy regardless of the administration in charge at this point, apparel brands may have to consider changing their supply chains to stay competitive it seems. Currently, most American growth is occurring on the West Coast due to the rise of the Asia-Pacific trade and the slow decline of the US-European trade channel that allowed the East Coast and Midwest to grow significantly in the early 20th century. Now, we see that the average Chinese person has been consuming a lot more as China becomes more advanced, and it could happen with Vietnam, India, and Bangladesh as these countries are achieving remarkable growth rates.

    If the US wants to keep clothing rates cheap, an option could be to move to West Africa and Latin America. While Nigeria has seen growth due to the export of oil to Europe and Latin America, improving West Africa could lead to improvements in trade in the Atlantic, and thus improvements in the cities along the East Coast.

  2. We saw the T&A industries evolve towards catching up to industrialization in the 21st century through the decreased reliance on skilled labor and heightened displacement of low-wage workers. The pandemic accelerated the downward trend in employment in the U.S. textile and apparel manufacturing sector. The future of textile and apparel production “Made in the USA” may rely more on jobs in R&D and marketing – evident in the smiling curve commodity chain – instead of low-wage manufacturing employment. Perpetuated by the pandemic, the focus on strengthening the Western Hemisphere supply chain may revolve around the USMCA for balancing the interests of both apparel and textile companies. Future decisions may include reevaluating the exceptions for rules of origin and comparing the benefits of flexibility to protectionist policies.

  3. One thing that surprised me is that in 1998 textile products had accounted for 58% of the total output of the U.S. textile and apparel industry, and as of 2019, textile products had only accounted for over 66% of the total output of the U.S. textile and apparel industry. That is only an 8% increase, and given that is a 21 year gap between those two numbers, I would have expected a lot more growth. Another thing that did not surprise me, especially given what we just witnessed with the pandemic, is certain textiles such as medical textiles growing very fast in the U.S. I think the pandemic made countries realize when times of crisis arise such as COVID-19, we need to be prepared and not rely on other countries for resources. I know specifically for the medical industry with mask/PPE production there has been an increase of textile production in the U.S. mostly because we did not have a choice, but moving forward I think we will make sure we have the proper resources so we are not let scrambling and unprepared.

  4. I think it is interesting to see how the US is changing the nature of their textile industry. As stated in the article, ““special fabrics and yarns” had accounted for more than 34% of U.S. textile exports in 2019, up from only 20% in 2010 “. This is a huge step because now they are hitting niche markets. By focusing in on niche markets they are opening more doors for people to want to source from them. If they were doing to basics in the textile industry they would have no competitive edge against China. Most brands do not source their textiles from the US because they are offered for much cheaper across the sea, so what would pull companies into wanting to use US manufactured textiles? They hit their mark by focusing in on special fabrics and yarns, maybe if they keep this up they will see that percentage grow.

  5. There are many trends to consider after reading this post. Yes, the coronavirus completely interrupted the supply chain in the Western Hemisphere, and U.S. fashion companies are looking to repair it. I just wanted to add something that has been mentioned in class. At first, whenever I see the “Western Hemisphere is strengthening its supply chain after COVID -19” I have always assumed that this was going to be the change where U.S. fashion companies switch to nearshoring or stop sourcing from China. But from what we have examined in class, this is not the case. We can not say that this is happening at a large scale. On top of that, I would have also assumed that the Western Hemisphere would have completely abandoned sourcing from China. Yet, this is not the case either. Rather, they are just reducing their exposure. However, one option I do think is extremely beneficial for U.S. fashion companies is to be involved with the agreement of the USMCA. As discussed in class, this trade agreement is beneficial for the textile sector as it creates a protected lucrative market between the U.S., Canada, and Mexico. However, for the apparel sector, they may not find it beneficial as they can’t source textiles from other countries that may be cheaper. Though, I still think it is a pro for them. By not sourcing from overseas, you are able to get your textiles from a closer source as well as have less reliance on China. This could also possibly prevent another incident of what happened with COVID-19. Companies may have to pay the price of more expensive textiles or a possible disruption in their supply chain again.

  6. I think COVID-19 is a door open for the U.S. to start sourcing, producing and manufacturing within itself again, or at least with countries that are geographically closer to us such as Latin America. This way it would take some of the reliance on China and other asian countries away and help us stand on our own 2 feet again. There is already a rocky relationship between China and the U.S. regarding the increased tariffs which has resulted in brands beginning to source elsewhere because they did not necessarily have an option. I don’t think America will stop sourcing from there anytime soon but I think as time goes on little by little the country will be less tied to them. I think looking to the EU for inspiration would be beneficial since they source and trade mainly with other European countries.

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