Some Modest Price Improvement
Robert S. Reichard, Economics Editor
radually rising demand — sparked by a growing economy — is beginning to inject a note of
firming in most textile quotes. In any case, most of the industry’s major price yardsticks
have started to inch up over the past month or two.
’s overall textile price index has edged up about 0.7 percent compared to late- 2003 levels.
Zero in on most major subgroups, and the trend seems to be pretty broadly based. Thus, small
increases in recent months have been reported in such diverse areas as yarns, greige goods,
finished fabrics, home furnishings and carpets. Indeed, only cotton among the major textile sectors
seems to have weakened a bit.
But because this key natural fiber is a cost rather than a revenue factor for mills, this could actually work to improve the overall industry’s bottom-line performance.
To be sure, the basic price firming just alluded to has been nowhere near as robust as in most other manufacturing areas. Nevertheless, it does represent a change — hopefully one that will continue into the second half of 2004, with even further advances likely as we move into the new year.
Other Positive Price Trends
The fact that apparel prices have advanced close to 1 percent over the past two reported months also has to be regarded as a plus sign for textile pricing — reducing downstream pressure on the part of clothing manufacturers and retailers to resist fabric price hikes. And, last but not least, textile import quotes are up 3.5 percent over the past year. Behind this rise: higher operating costs for overseas mills plus the impact of a slowly weakening dollar. If nothing else, this change in the import price trend from down to up reduces the big gap between domestic and foreign tags, thereby permitting both domestic mills and apparel makers to nudge their own asking prices up a bit. But even with all these positive price signs, it would be unrealistic to expect anything dramatic in the way of a meaningful textile price recovery. Indeed, TW’s own equations — which factor in all the pertinent demand, supply, capacity and cost variables — suggest little more than 1-percent average gains this year for both the primary mill and mill product segments of the industry.
Other Signs Of A Flattening Out
The continuing bottoming out in textile production and sales also has to be regarded favorably. Shipments on the primary textile level have been holding fairly steady now for more than six months. And much the same trend is reported for textile mill products such as home furnishings and carpets. The textile industry production index, which includes both the primary mill and mill product sectors, tells much the same story. This is all in sharp contrast to 2001, 2002 and 2003 when overall activity (as measured by mill production) dropped 10 percent, 4 percent and 7 percent, respectively, when compared to the previous years. Add in the fact that industry orders and backlogs are now beginning to show some fractional improvement, and 2004 as a whole should show the first increase in domestic textile activity since the late 1990s.
An Assist From New Products
Innovative new and improved fabrics should also help buoy up demand — with an imposing list of
offerings hitting the market or scheduled to do so in the near future. Levi Strauss, for example,
is about to introduce three new lines: improved wrinkle-proof pants; khakis that absorb body heat;
and shirt fabrics that stop sweat stains from showing. Then there are new entries that resist
fading, wrinkling, shrinking and staining after multiple launderings — plus new wrinkle-resistant
washable suits in blends of polyester, wool and spandex that can be laundered at home and still
look fresh and crisp. Other breakthroughs: non-dry-clean fabrics that repel all types of insects
and are effective for 25 washings; antimicrobial yarns for odor control; improved stretch fabrics
for activewear; and new nonwovens made from a broad array of engineered fiber and polymer-based
Natural fibers aren’t being ignored either. Thus, there are new woolens that offer washability and greater comfort, as well as denims that are washed and treated to create the appearance of non-denim khaki constructions.
Download Current US Textile and Economic Indicators.