Diverging Price Trends
By Robert S. Reichard, Economics Editor
Demand Trends Are Mixed, Too
The basically uneven activity pattern of the first half of the year also is continuing as the current quarter draws to a close. Based on the latest available numbers, more highly fabricated textile mill products like carpets, home furnishings and industrial products are still pretty much holding their own — with year-to-date figures showing dollar shipments running better than 3 percent ahead of comparable 2005 levels. That’s a pretty encouraging sign, given today’s competition from China and other foreign suppliers. However, the situation for more basic textile products like yarns and fabrics is a lot less upbeat. Year-to-date dollar shipments in this sector are down by more than 10 percent when compared to a year earlier. And if you factor in the scattered price increases that occurred in late 2005, volume declines could be a bit more precipitous.
The Impact On Employment
These changing demand trends are also affecting overall domestic textile industry job totals. Employment in the more highly fabricated textile product sector hasn’t been doing all that badly. The number of domestic workers employed here is down by only a small 2 percent when compared to one year ago.
On the other hand, losses in the basic mill sector have been far more troublesome — with the workforce in this sector declining by more than 10 percent over the past 12 months. Combine these two key textile sectors, and employment totals are off by about 6.5 percent over the same 12-month period. Again, that’s not all that bad, given that industry productivity has increased by about 3 percent over the same period. If nothing else, it reinforces the contention that textiles are still an important component of the US economy.
New National Council of Textile Organization (NCTO) figures would seem to back this up — with the Washington-based group estimating there still are nearly 1 million workers employed in textiles and related fields. NCTO further adds the industry still contributes $60 billion to US gross domestic product and $16 billion to overall US export totals.
Another piece of upbeat news — this time on the import front: Washington lawmakers have okayed a bill that would increase the use of American trouser and pocket fabrics going into apparel made in the Central America-Dominican Republic Free Trade Agreement (CAFTA-DR) region. To be sure, this is hardly earthshaking news. On the other hand, it’s a move in the right direction. More importantly, it suggests the administration and Congress are finally working to make CAFTA-DR a success.
And this can’t be underestimated, for the CAFTA-DR region is the second-largest market for US yarns and fabrics — with the US textile industry exporting more than $4 billion in textiles and apparel to Central America. Also, apparel imported into the United States from CAFTA-DR countries has on average more than 70-percent US content. That’s in sharp contrast to apparel imported from China, where the US fabric content is less than 1 percent. Another encouraging trade sign is the lack of any big increase in overall US textile and apparel imports, which for the year to date continues to run only 2 percent above comparable 2005 levels — a big improvement over 2005’s hefty 10-percent jump.
Download Current US Textile And Economic Indicators.