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US Textile and Apparel Companies Turning to Domestic Production

In 1973, 2.4 million people worked in the US textile and manufacturing industries.By 1996, that number had dropped to 1.5 million. Today, the industry employs just 3,85,000 people. After cheap labor led to companies taking their businesses overseas in the '80s and '90s, almost 98 per cent of American apparel is now being made abroad.

But recent investments in automation and technology at American factories, as well as a rising emphasis on Made in America' products, are promising for the domestic manufacturing industry. For US apparel companies, keeping their supply chain in the US is less a valiant act of patriotism and more about maintaining clarity and control over production. Direct-to-consumer brands that aren't beholden to wholesale pay-outs and promotional cycles don't need to send their production overseas in order to cut costs. And by keeping production domestic, direct-to-consumer brands get another advantage: they can react quicker to customer demands.

To get a low price overseas, companies have to order a lot of product, and have to order it at least six months in advance. But more and more, customers don't want something produced in such massive quantities. Retail is getting pushed hard, and people aren't shopping the way that they used to.

There are issues facing the US fashion industry. Only 36 per cent of executives expect to increase sourcing from Vietnam, compared to 56 per cent last year; this is likely due to the US' withdrawal from the Trans-Pacific Partnership. Among all sourcing destinations examined this year, Bangladesh is considered the most competitive in terms of price - but also the riskiest in terms of trade compliance.

Free trade agreements remain underutilised; only the North American Free Trade Agreement (NAFTA) is utilised by more than 50 per cent companies. Ethical sourcing and sustainability are given more weight in sourcing decisions. The proposal for a border adjustment tax is unanimously opposed.





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