State of the U.S. Textile and Apparel Industry: Output, Employment, and Trade Patterns (Updated March 2019)

The size of the U.S. textile and apparel industry has significantly shrunk over the past decades. However, U.S. textile manufacturing is gradually coming back. Notably, the value added of U.S. textile manufacturing reached $18.88 billion in 2017, the highest level since 2009.

Nevertheless, the share of U.S. textile and apparel manufacturing in the U.S. Gross Domestic Product (GDP) dropped to only 0.15% in 2017 from 0.57% in 1998, as the case in most advanced economies with a mature industrial system.

It is also important to note that U.S. textile and apparel manufacturing is changing in nature. For example, textiles had accounted for over 80% of the total output of the U.S. textile and apparel industry as of 2017, up from around 50% in the late 1990s. Meanwhile, clothing had only accounted for 12% of the total U.S. fiber consumption in 2012 (the latest data available), whereas the manufacturing of non-apparel textile products in the United States, such as industrial and technical textiles, has been growing particularly fast over the past decade.

Manufacturing jobs are NOT coming back to the U.S. textile and apparel industry. In 2018, U.S. textile manufacturing (NAICS 313 and 314) and apparel manufacturing (NAICS 315) lost 2,100 and 4,800 jobs respectively. However, improved productivity is one critical factor behind the job losses.

Regarding international trade, the United States remains a leading textile exporter and apparel importer overall. Interesting enough, both the value of U.S. textile and apparel imports enjoyed much faster growth in 2018 than in the previous years. Notably, for the first time since 2001, the U.S. textile sector (NAICS 313) experienced a trade deficit ($172 million) rather than a trade surplus. Meanwhile, the U.S. trade deficit in apparel (NAICS 315) reached $86,097 million in 2018, up nearly 6% from a year ago. These unusual trade patterns could be partially affected by the U.S.-China tariff war, which didn’t seem to be helpful with solving the trade deficit concerns.

by Sheng Lu

Related reading:

USITC Studies the Impact of Trade on Manufacturing Jobs in the U.S. Textile and Apparel Industry

job impact of trade

employment in the US T&A industry

In its newly released Economic Impact of Trade Agreement Implemented under Trade Authorities Procedures, 2016 Report, the U.S. International Trade Commission (USITC) provides a quantitative assessment on the impact of trade on manufacturing jobs in the U.S. textile and apparel industry. According to the report:

  • Manufacturing jobs in the U.S. textile and apparel industry have been declining steadily over the past two decades. Between 1998 and 2014, employment in the NAICS 313 (textile mills), NAICS314 (textile product mills) and NAICS 315 (apparel manufacturing) sectors on average decreased annually by 7.6 percent, 4.3 percent and 11.2 percent, respectively.
  • Rising import is found NOT a major factor leading to the decline in employment in the U.S. textile industry (NAICS 313)–as estimated, imports only contributed 0.4 percent of the total 7.6 percent annual employment decline in the U.S. textile industry. Instead, more job losses in the sector are found caused by improved productivity as a result of capitalization & automation (around 4.6 percent annually) and the shrinkage of domestic demand for U.S. made textiles (around 3.5 percent annually) between 1998 and 2014.
  • Rising imports is the top factor contributing to job losses in apparel manufacturing (NAICS 315), however. As estimated by USITC, of the total 11.2 percent annual employment decline in apparel manufacturing, almost all of them is affected by imports (10.8 percent). On the other hand, increased domestic demand for apparel (such as from U.S. consumers) is found positively adding manufacturing jobs by 2 percent annually in the United States from 1998 to 2014.
  • To be noted, USITC did not estimate the impact of trade on employment changes in the retail aspect of the industry. According to the U.S. Bureau of Labor Statistics, approximately 80 percent of jobs in the U.S. textile and apparel industry came from retailers in 2015. These retail-related jobs are typically “non-manufacturing” in nature, such as: fashion designers, merchandisers, buyers, sourcing specialists, supply chain management specialists and marketing analysts.

US Apparel Manufacturing Jobs Continue Declining in 2015

[Updated data is available: U.S. Continues to Lose Apparel Manufacturing Jobs in 2016]

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It may disappoint those who are hoping a return of apparel “Made in USA”, but according to the latest statistics from the Bureau of Labor Statistics, the U.S. apparel manufacturing sector (NAICS 315) lost another 4.2% jobs from April 2014 to April 2015. From January 2008 to April 2015, about 86,800 jobs (or 39%) in the U.S. apparel manufacturing sector had disappeared.

From the academic perspective, a sizable return of apparel manufacturing job in the United States seems to be extremely unlikely given the nature of the U.S. and global economy in the 21st century.

First, it is all about comparative advantage suggested by classic trade theories. The World Bank data show that from 1980 to 2010, the U.S. GDP increased by 424% (note: world GDP increased by 484% over the same period) whereas the total U.S. population was only 23% higher in 2010 than in 1980 (note: world population increased by 65.21% over the same period). This suggests that the United States actually is becoming more capital & technology abundant with less comparative advantage in manufacturing labor intensive apparel. A sizable return of apparel manufacturing in the United States might only happen in the following two occasions: 1) apparel manufacturing can be automated like textile manufacturing; 2) substantial amount of foreign workers were allowed to work in the United States. Unfortunately, neither of the two occasions seem likely to happen at least in the near future.

Second, it is about US apparel company’s business model in the 21st century. The suggested dominant types of apparel companies in the United States today are “branded manufacturers” and “marketers” whose business models heavily rely on global sourcing and non-manufacturing activities such as branding, marketing and design (Gereffi, 1999). If you carefully read US apparel companies’ annual reports, seldom you’ll see a company still regards “manufacturing” as a key competitive advantage or an area of strategic importance to invest in the future.

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Additionally, according to data from the U.S. Bureau of Economic Analysis (BEA), the percentage of compensation of employees in the apparel industry’s total value added has been gradually declining since 2008. Similar trend is also observed in the U.S. economy and the U.S. manufacturing sector as a whole. Does the result imply that labor input is becoming less important to the output of the U.S. apparel industry? Or does the result suggest that U.S. apparel companies are more willing to invest on buying machines than hiring more people? Maybe it is the time that we shall pay more attention to the labor-capital substitution trend in the U.S. apparel industry.

Outlook for the U.S. Textile Industry in 2015

In its annual industry analysis report, the Textile World (TW) presents another optimistic outlook for the U.S. textile industry in year 2015.

First, the U.S. textile industry is predicted to be in a good shape economically this year. For example, according to TW, shipment of textile mills (NAICS 313 &314) is expected to increase 3-4 percent in 2015 from last year. Value of apparel manufacturing (NAICS 315) may also increase 5 percent. Additionally, market demand for basic mill products (fibers and fabrics), nonwoven fabrics and fabrics designed for activewear could be particularly strong this year.

Second, the U.S. textile industry will continue to bring back “made in USA” through capitalization. As observed by TW, new plant and equipment spending is widespread in the U.S. textile industry in recent years, covering activities ranging from fibers, spinning, nonwovens, composites, technical fibers to textile chemical. TW further estimates that some 2.2 percent of mill shipment dollars will be spent on new investment in 2015, a level much higher than a few years ago.

Third, trade deficit in the U.S. textile industry is gradually shrinking. On one hand, TW estimates that due to China’s decreasing market share, imports of T&A to the United States will down 1 percent in 2015. This trend may continue in the years ahead. On the other hand, TW estimates that the U.S. textile exports will continue to grow for the straight 5th year in 2015. However, TW doesn’t believe textile and apparel manufacturing will have any big near-term shift back to the U.S, nor the total employment in the industry (because increased production is to be made by machines).

Fourth, sustainability and supply chain management will attract even more attention by the industry in 2015. As mentioned by the TW report, consumers nowadays have become more aware of the environmental impact of textile and apparel manufacturing. This pushes companies to make more efforts to address issues such as toxins, waste and the amount of water used for production. On the other hand, supply chain management has started to play even more important roles in controlling cost and increasing profit. For example, quoted by TW, performance of supply chain management may result in 10 percentage point differences in profit margin in the textile industry nowadays.

Fifth, trade policy will continue to have a substantial impact on the the U.S. textile industry.  2015 could be a big year for trade policy in the United States. Things that are on the top watch list in 2015 include details of the Trans-Pacific Partnership negotiation and whether the Trade Promotion Authority (TPA) bill can be passed by Congress.

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