US textile sector set to grow

Research indicates that the US textile sector looks set to grow. Can our own textile sector take lessons from the US?

Textiles 2010: A Light At The End Of The Tunnel

Continuing capital investment, improved logistics, among other factors, are helping to set the stage for an improving economic climate.

I t's beginning to look a bit brighter for the hard-pressed U.S. textile and apparel industries. Activity is no longer in free fall -- and, more importantly, the new year is promising continuing improvement.

To be sure, the huge slippages of 2008 and 2009 -- the biggest since the Great Depression -- won't be recouped. In fact, it may be difficult to avoid additional fractional losses over the next few quarters. But, by late in the year or in early 2011, domestic textile and apparel firms could well be sporting some scattered gains.

More importantly, this appraisal is based on more than just wishful thinking. An already improving macroeconomic trend -- with gross domestic product expected to increase 2 to 3 percent this year -- is bound to have some positive impact. Other things being equal, a rising business curve should mean rising incomes and hopefully a concomitant advance in textile and apparel activity.

Equally encouraging: Both textile and apparel firms have managed to weather the recession in tolerably good financial shape. If there's any doubt on this score, take a look at their earnings reports. True, last year's operating profits dropped a fair amount. Nevertheless, mills for the most part have managed to avoid some of the catastrophic losses experienced by many other industries.

Key factors behind this better-than-might-have-been-expected bottom-line performance are the host of innovative steps taken to maintain and strengthen positions in today's hotly competitive marketplace. Companies are making great strides in reinventing themselves -- putting more and more emphasis on raising standards, introducing more improved and new products, and anticipating consumer needs.

To help accomplish these industry targets, mills are continuing to invest in new plants and equipment, despite today's financial restraints. As one company CEO recently put it: "That's the only way to survive. We just can't afford to ignore the latest improvements in productivity and quality."

Still another hopeful sign: Growing realization by Washington lawmakers that more has to be done to level the international playing field. Some halting steps already have been taken, and more are contemplated.

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By: Robert S. Reichard, Economics Editor-Textile World
Jan/Feb 2010