Apparel is third-largest re-shored US sector – just-style.com

24 apparel companies have restored their business to the US

Apparel manufacturing is the third-largest reshored sector of all industries in the US, after electronics and computers, just-style has been told.

Since the momentum for reshoring began in 2011, 24 apparel companies have been reshored, compared with 41 electronics companies, including appliances, and 26 computer firms, according to Harry Moser, founder of the Reshoring Initiative.

In turn, demand for ‘Made in America’ apparel is rising, with the US-produced share of apparel consumed having increased from about 1.7% to more than 2% between 2012 and 2013, Moser told just-style, calling it a “large relative change.”

The momentum has been helped by the country’s abundant supply of shale gas and its positive impact on the price of synthetic fibres, Moser argued.

This follows a Boston Consulting Group note saying it expects net labour costs for manufacturing in China and the US to converge from 2015.

Still there are obstacles to re-shoring including an “overvalued US dollar, way undervalued Chinese currency, high US corporate taxes and regulations, general difficulty recruiting into manufacturing, and specific lack of workers with apparel and textile skills,” Moser said, but added its benefits outweigh the difficulties. “There is debate only on the magnitude” of reshoring.

He advises brands to e-evaluate their offshoring by using the Total Cost of Ownership (TCO) or similar decision-making tools. “Our user data suggests that about 25% of what is now offshored would come back if companies made decisions based on TCO instead of price,” he added.