American fashion industry executives are concerned about the impact of trade protectionism according to the latest study by the US Fashion Industry Association (USFIA).
This week the USFIA released its fifth annual Fashion Industry Benchmarking Study, with findings showing overall optimism but with widespread concern about trade barriers, increased tariffs and the effect on fashion businesses.
The study surveyed executives from nearly leading fashion brands retailers importers and wholesalers including some of America's largest retailers. Conducted in conjunction with Dr. Sheng Lu, associate professor at the University of Delaware Department of Apparel Studies, the survey asked respondents about business outlook sourcing practices utilization free trade agreements preference programs views on policy.
Trade policies are top concern for fashion industry
For the second year in a row trade policy agenda United States is ranked top challenge U.S. fashion industry, more than percent of respondents rank this issue among their five business challenges with one-third ranking it either or far exceeding concerns about other issues on list. from consistently protectionism between and
Companies' growing concerns about the direction of U.S. trade policy under the Trump administration are understandable states report. Since January, the President has issued at least six presidential proclamations imposing punitive tariffs on steel and aluminum exports from several important allies. In response the European Union, Canada, and Mexico have retaliated against some products including apparel home textiles.
Similarly based on the results of investigation china ip practices under section trade act trump administration has announced it will levy additional tariffs percent to hundreds billions U.S. imports from China.
While it is too early to know whether this will be a “trade war” or a temporary hiccough, U.S. fashion brands and retailers are justifiably concerned.
Increased sourcing costs
Another time of concern is the pressure of “increasing production or sourcing cost” for brands and retailers. 54 percent of executives rank cost among their top five business challenges in 2018, a notable increase from 34 percent in 2017. There are two possible explanations: cost could be rising in absolute terms, and the intensified trade tensions caused by the protectionist trade policy agenda may force companies to switch to more expensive sourcing destinations, writes Dr. Lu.
Despite concerns about trade policy and cost executives are more confident the five-year outlook for U.S. fashion industry in than they were a year ago although confidence has not fully recovered to level seen.
In addition percent of respondents say they plan to hire more employees the next five years compared with previous studies market analysts data scientists sustainability related specialists or managers and supply chain are expected be most in-demand.
Sustainability is a priority
85 percent of respondents plan to allocate more resources for sustainability and social compliance in the next two years, in areas including providing training to suppliers and internal employees, adding more employees, and working more closely with third-party certification programs on sustainability and social compliance. However, the availability of operational budget remains the primary hurdle for companies that want to do more.
The survey was conducted between April 2018 and May 2018. In terms of business size, 76 percent of respondents have more than 1,000 employees, including 64 percent with more than 3,000 employees; this suggests the findings well reflect the views of the most influential players in the U.S. fashion industry.
Photo credit: Sadlers UK; Article source: USFIA 2018 Fashion Industry Benchmarking Study By Dr. Sheng Lu