Textiles and apparel are not "thriving": Why the U.S Still Needs A Production Economy

Textiles and apparel are not “thriving”: Why the U.S Still Needs A Production Economy

September 21, 2013
Michael Mandel

The NYT just ran a story entitled “U.S. Textile Plants Return, With Floors Largely Empty of People.” You might read that story and think, hey, the U.S. has no production problem. But I will show you here that the story left out important statistics which demonstrate that there has been no significant recovery in textile and apparel production whatsoever in recent years. The implication: If production did rebound, we could produce significant good jobs in these industries even with robotics.

The story was relentlessly upbeat about the return of domestic textile and apparel production, as contained in the following line (my emphasis):

the fact that these industries are thriving again after almost being left for dead is indicative of a broader reassessment by American companies about manufacturing in the United States.

Thriving, huh? Here are four facts you might find interesting:

Domestic apparel production today is lower than it was in 2009, at the depths of the recession.
Compared to 2007, domestic apparel production is down about 50%
Domestic textile mill production today is 5.5% lower than it was a year ago.
Compared to 2007, domestic textile mill production is down about 25%.

And for those of you who are gluttons for punishment, here are the charts of apparel production, textile mill production, and textile product production (drawn from Federal Reserve data). The bottom line–there is no sign of a production rebound or recovery in any of these industries, robots or no.

Now, there’s a lot of questions we could ask here. Did the NYT editors and reporters know these numbers, and just decided to not put them in because they fought the story? And what about wage and productivity stats for these industries, or even import statistics to put some context on the one upbeat number about textile and apparel exports? Here’s what the story said:

In 2012, textile and apparel exports were $22.7 billion, up 37 percent from just three years earlier.

Here’s what the story didn’t say: The trade deficit in textiles and exports was wider in 2012 ($92.7 billion) than 2007 ($91.2 billion). Exports rose, but imports rose more.

The fact is, if the story is right and U.S. firms are cost competitive with Chinese firms, then there’s plenty of room to expand production in U.S and create jobs. This mainly requires investment,which ties into the recent PPI Investment Heroes paper. It also may require new technology to dramatically change the whole business model, including 3D printing and aspects of the Internet of Eveything.