Is Textile and Apparel Manufacturing Coming back to the U.S.?

output

output growth rate

employment

employment growth rate

Preliminary Findings:

1. As suggested by numerous studies, the U.S. manufacturing sector as a whole demonstrated a robust V-shaped recovery from the 2008 financial crisis in terms of industry output.   Growth rate of the industry output from 2010-2011 was also among the highest in the past 10 years.

2. There is no sign yet that textile and apparel (T&A) manufacturing is coming back to the U.S, despite suggested popularity of “insourcing” as result of rising labor cost in China. However, the decline rate of apparel manufacturing in the U.S. seemed to be slowing down.

3. Jobless recovery happened both in the U.S. manufacturing sector as a whole and in the T&A manufacturing sectors. Particularly, the U.S. T&A industry respectively lost 21.0% and 25.6% of its manufacturing jobs from 2008-2012 compared with only 10.8% decline of employment in the manufacturing sector over the same period.  Based on the current data, it can be concluded that a sizable return of manufacturing jobs in the U.S. T&A industry would hardly occur at least in the near future.

Sheng Lu

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Author: Sheng Lu

Professor @ University of Delaware

3 thoughts on “Is Textile and Apparel Manufacturing Coming back to the U.S.?”

  1. I believe that the increase in manufacturing, as the above charts show, is due to the fact that the economy began to recover briefly after the significant drop in 2008. Despite this small rise after the significant drop, I do not believe that T&A manufacturing will ever come back to the US. The cost of manufacturing in the US is so high compared to China and other countries overseas that we will never be able to compete with T&A manufacturing. One possible explanation for the “decline rate of apparel manufacturing in the US…slowing down” is that there is already so much production going on overseas. We are at a point now where the majority of apparel production is happening overseas, so the little bit that still goes on in the US doesn’t necessarily affect the market enough to send that production overseas as well. Since so much already happens in foreign countries, the small portion that is left in the US likely isn’t a major concern to those in the industry as far as costs.

  2. Even though China has a rising labor cost, I don’t think the manufacturing of apparel would even come back to the U.S. I think the price is way to high compare to what companies want to pay. If China’s wage continues to rise, I think companies will just move to another developing country. I don’t think the T&A employment would ever increase greatly in the United States.

  3. I agree and disagree with coolong13. I agree that the “decline rate of apparel manufacturing in the US… slowing down” because there is so much production overseas that even the little that is still done in the US doesn’t effect the market. However, I disagree that there is no opportunity for manufacturing to happen here in the US. I feel that it will come back to the US.. maybe not soon but it definitely will. I feel this way for two reason: the first is the fact that the hourly wage rate in developing countries will continue to increase where it become ineffective to send our manufacturing overseas. The second reason deal with the “patriotism” we have in this country, especially after all of the things that have happened this year, with the bombing in Boston, that soon America will decide that we need to band together and help our country and deal with the increasing unemployment rate.

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