A new report by Wazir Advisors reveals a significant decline in apparel imports across major global markets in January 2024 compared to the same period last year. The US, EU, UK, and Japan all witnessed double-digit drops, with the US leading the decline at 16.53 per cent to $6.04 billion.
This slump in imports coincides with a complex economic picture. While US consumer confidence dipped in February, apparel store sales surged 10 per cent compared to February 2023. This suggests a market clearing out existing inventory, potentially paving the way for a rebound in imports later in the year.
Global import slump
The report highlights a widespread slowdown in apparel imports. The EU saw a 20 per cent year-on-year decline to $6.6 billion, while the UK and Japan experienced drops of 18 per cent and 14 per cent respectively, reaching $1.4 billion and $1.9 billion.
US Market: Inventory clearance or long-term shift?
The US market presents a fascinating case. Despite a decline in consumer confidence and rising inflation, apparel store sales rose in February. This could indicate a period of aggressive inventory clearance by retailers. Wazir Advisors analysts forecast a potential rebound in US apparel imports based on this trend. With lower inventory levels and sustained consumer demand, the US market could see a rise in imports in the coming months.
Other markets
The report offers limited data on other markets. The UK, for instance, saw a modest decline in apparel sales, suggesting a different dynamic at play compared to the US. Further analysis is needed to understand the specific factors influencing individual markets.
India's apparel trade
While the report focuses on global trends, it also includes a snapshot of India's apparel trade. India's apparel exports witnessed a modest 1 per cent increase in February, reaching $1.4 billion. Conversely, apparel imports into India dropped significantly by 23% to $109 million in January.
Wazir Advisors' report doesn't offer an explicit forecast, but the data points towards a potential rebound in the US apparel market. Lower import figures coupled with rising sales suggest that existing inventory is being cleared, paving the way for renewed demand and potentially higher imports in the coming months. However, factors like consumer confidence and inflation will play a crucial role in shaping the market's trajectory.
