March 2024 saw a significant slowdown in the global apparel industry, with import and export figures falling in all major markets.

The fall in imports reflects the fall in demand

Import figures from key markets such as the US, EU, UK and Japan were grim. The United States is the world's largest importer of apparel, and in March 2024, the value of apparel imports in the United States fell 6% year-on-year to $5.9 billion. Similarly, the European Union, the United Kingdom and Japan declined by 8 percent, 22 percent, 22 percent and 26 percent, respectively, underscoring the decline in global demand. The decline in clothing imports means a shrinking clothing market in major regions.

The decline in imports is consistent with retailer inventory data for the fourth quarter of 2023. The data showed that inventory levels of retailers fell sharply compared to the previous year, suggesting that retailers are cautious about adding to their inventories due to weak demand.

Consumer confidence and inventory level both reflecting weak demand

This is compounded by falling consumer confidence. In the U.S., consumer confidence hit a seven-quarter low of 97.0 in April 2024, meaning consumers are less likely to splurge on clothing. This lack of confidence could further depress demand and hinder a quick recovery in the apparel industry. The report also said retailers' inventories have fallen sharply compared with last year. This indicates that stores are selling out of existing inventory and are not ordering new clothing in bulk. Weaker consumer confidence and lower inventory levels suggest a drop in demand for clothing.

Export plight of major suppliers

The situation of apparel exporters is not good as well. Major apparel suppliers such as China, Bangladesh and India also experienced declines or stagnation in apparel exports in April 2024. This shows that the economic slowdown is affecting both ends of the global apparel supply chain, but supplier countries are still managing to export some clothing.

The confusing American clothing retail

The report shows a puzzling trend in the U.S. apparel retail industry. While U.S. clothing store sales in April 2024 are estimated to be down 3% from April 2023, online apparel and accessories sales in the first quarter of 2024 are down only 1% from the same period in 2023. Interestingly, sales at U.S. apparel stores in the January-April period of this year were still 3% higher than that in 2023, indicating some underlying elastic demand. So even though apparel imports, consumer confidence and inventory levels all point to weak demand, U.S. apparel stores have seen a surprise increase in sales.

However, this resilience appears to be limited. Sales of household goods stores for April 2024 mirrored the overall trend, down 2% year on year, and cumulative sales for the January-April period this year were about 14% lower than that in 2023. This suggests that discretionary spending may be shifting away from non-essential items such as clothing and household goods.

The UK market is also showing consumer caution. In April 2024, UK clothing stores saw sales of £3.3 billion, down 8% on the previous year. However, online apparel sales in the first quarter of 2024 increased by 7% compared to the first quarter of 2023. Sales at UK clothing stores are stagnant, while online sales are growing. This suggests that UK consumers may be shifting their shopping habits to online channels.