1.0 IntroductionThe modern age has been associated with the design of new models of apparel and textile across the world. Majority of what people wore in the 19th century was made using hands or dressmakers. Later in the 20th century, the apparel and textile industry witnessed a tremendous growth as a result of the growing technology. Advanced technology resulted to the creation of factory systems that resulted to a mass production of clothing that is sold at certain fixed prices. According to Olsen (2006), the apparel and textile industry is an international trade whereby fabric is sourced from a country, manufactured in another country, finished in a different country and later shipped in the owner country for retail sale.
This paper will analyze the case of the United States apparel and textile industry focusing on the following aspects: industrial analysis, structure, raw material, demand, prices and competition from similar products. 2.0 Industrial analysisUnited States depends on textile products from Asian countries for the manufacture of its clothing products. Currently, the textile industry in the United States is faced with a crisis that arises from the changes that are arising from the global trade.
The devaluation of exchange rate of majority of countries that export textile products in Asia is one of the contributing factors to the textile crisis in the United States as indicated in figure 1. In addition to this, the multilateral agreements and trade liberalization policies have increase the accessibility of products to the United States market. The World Trade Organization established that the crisis in the textile industry has contributed to unemployment as a result of job losses.
The most affected region is the rural areas of the South eastern region where this trade is more concentrated. The global financial crisis especially during the period 1997/1998 resulted to the currencies of major Asian exporters to drop (Amponsah & Boadu, 2002). On the other hand, the apparels market in the United States has faced volatility as a result of frequent change in fashions thereby creating an economic stress to the industry and its participants in the rural areas. According to the United states Department of Commerce, there were 5117 textile companies and 6134 textile plants.
The gross sale of cotton fiber textile was $58 billion in the year 2000 though this was a drop from $60.3 billion in 1999. On the contrary, the industry is still the leading manufacturing employer which employed close to 1.4 million people in the year 2000. According to the United States Bureau of Labor Statistics, 425 000 jobs in the apparel and textile industry were lost since the year 2000 (American Textile Manufacturers Institute, 2007). Further the United States Bureau of Labor Statistics established that the textile and apparel industry is the leading employer in ten of the major states in the United States.
The apparel and textile industry is currently facing competition from other leading producers (Plunkett, 2008). This among other problems like overproduction, abrupt changes in fashion and demand, importation of cheap raw material from Asia and the global financial crisis has prompted US to seek ways of addressing the problem. In order to address the problem, the US textile industry has invested high speed, efficient and automated technology while sacrificing the loss of domestic jobs.
Textile and apparel worth $16 million were exported in 1997 which was equivalent to 31 percent of the industry’s total annual sales. However, the global over production of textile and apparel products in addition to the ease of substituting imports with other products has resulted to competition in the US market.