Is “made in the USA” clothing having a comeback?

Published
January 2017

The state of US apparel manufacturing

Manufacturing in America, and clothing manufacturing in particular, has been much in the spotlight during last year’s US Presidential campaign, with Donald Trump famously saying that “They don’t even make them here anymore” (referring to men’s ties, dress shirts, etc.). While this claim is not technically correct (there are companies that make all kinds of apparel in the US, including men’s ties), it does broadly reflect reality. The latest statistics from the American Apparel and Footwear Association (AAFA) show that 98 percent of shoes and 97 percent of clothes sold in the United States in 2015 were imported. Given the lower costs of manufacturing abroad, why are some companies deciding to make apparel in the US?

 

Why manufacture in the US?

A recent article in Fast Company provides some answers. It cites the example of Yogasmoga, a fast-growing athletic apparel maker. Its founder and CEO wanted to create his own technical fabrics, monitor quality, and have the flexibility to scale up production quickly. He felt that the only way to achieve these goals was to set up production in the U.S. The company developed special fabrics, experimented with them at their manufacturing facility in Massachusetts, and sold the ready garments in stores across the US. The article goes on to quote the CEO:  "It can take ten months to go from placing an order at a Chinese factory to receiving a shipment of clothes. By using local factories, I'm able to meet demand much quicker."

There are many examples of startups or small companies manufacturing clothes and shoes in the US. However, most large companies still make their clothes abroad, mainly in Asian countries. There are a few notable exceptions. American Apparel is famous for making all of its clothes at home, and some younger companies are trying to do the same. One of them, American Giant, the maker of hoodies and other casual wear, claims that “We would never be where we are today if we were overseas. Nowhere close.”

 

Will it last?

As encouraging as these stories are, they are still a drop in the ocean. The volume of US-produced clothes and shoes is tiny. However, it has been growing in recent years. The AAFA reports that US apparel and shoe manufacturing rose for the sixth consecutive year in 2015, with 1.6 percent of all shoes sold in the US manufactured in the country (the highest rate since 2004), and 2.7 percent for clothing (the highest rate since 2008).

It is hard to predict whether this trend will continue, and how big it will be. Certainly, the outsourcing of apparel manufacturing had happened very rapidly. In 1993, 52 percent of garments sold in the US were also made here; twenty years later, in 2013, it was just 2.5 percent (source). Not many had predicted such a dramatic shift.

There are a few trends that might make reshoring more attractive. One, increasingly sophisticated production technology means fewer workers will be needed to manufacture clothes. Second, a shift in trade and tariff policies by the incoming administration might change the equation for the whole US apparel business. And finally, the growing trend to buy less, but higher quality clothes, promoted by eco-conscious consumers and companies, could also benefit US-based manufacturers.

Only time will tell if the combination of these trends will bring about a revival of U.S. apparel manufacturing.