U.S. Apparel Imports Drop in July

After surging in June as retailers pushed orders ahead of schedule in anticipation of a West Coast dock workers stoppage, apparel imports dropped by 1 percent in July, to $9.28 billion on a CIF basis, according to data released late last week by the U.S. Department of Commerce.

Many retailers had worried that the contract between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA), which officially expired July 1, would result in shipments being held up in critical West Coast ports, and as a result pushed many orders which would have arrived in July up by one month.

July, usually one of the biggest apparel import months of the year, saw volume negatively impacted this year by the June shipping increase, which in hindsight was unnecessary, since the union members continued to work as negotiations for a new contract continued, and a tentative agreement was reached in late August.

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Total imported goods and services gained 3.5% in the month compared to the same month last year, primarily due to an increase in imports of automobiles and parts, capital goods and consumer goods. A rise in travel and transport also helped boost imports.

China, Vietnam, Bangladesh and Indonesia were the top sources of U.S. apparel in July, with China at $3.2 billion, Vietnam with $890 million, $490 million for Bangladesh, and $466 million for Indonesia. Imports from Vietnam grew 6.1% over June of last year, while those from China fell by 3.6%.

On a 12-month smoothed basis, which corrects for volatility of data in a particular month, apparel import growth slowed to 2.1% in July after accelerating to 2.8% in June.

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Apparel exports rose 5.8% percent to $511 million, on top of an impressive 6 percent increase in June, outpacing overall goods and services export growth of 4.5%. On a 12-month smoothed basis, apparel exports accelerated by 4.3% in July.

Canada is the biggest market for U.S. apparel exports, followed by Mexico, the U.K., Japan and Honduras. Apparel exports to El Salvador have grown 13.4% to $72 million and to Chile by 12.6% to $62 million. Exports to Germany have grown by 11.7% to $57 million (making it one of the top 10 destinations for U.S. apparel exports), while those to the Netherlands have dropped by 8 percent.

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