The United States Fashion Industry Association (USFIA) has released the seventh annual Fashion Industry Benchmarking Study that details respondents’ outlook on business, their sourcing practices, utilization of Free Trade Agreements and preference programs, and views on trade policy.
The study surveyed executives from 25 leading fashion brands, retailers, importers, and wholesalers, including some of the largest brands and retailers in the country. It was conducted in conjunction with Dr. Sheng Lu, Associate Professor, Department of Fashion & Apparel Studies, University of Delaware.
Sourcing executives showed the lowest level of confidence in the five-year outlook since the inception of this report. The number of respondents who were either optimistic or somewhat optimistic about their outlook for the next five years dropped from 64 to 57 per cent. One-third of the respondents reported being ‘somewhat pessimistic’ or ‘pessimistic.’ Hundred per cent respondents reported ‘supply chain disruption’ as the most significant impact of COVID-19 on their business operations. Many respondents saw garment factories that make their products struggling with a labor and raw materials shortage or facing a substantial cost increase in shipping and logistics, and barriers to conducting regular factory audits because of COVID-19.
Despite COVID-19 related disruptions, sourcing executives may continue to diversify to Asian countries. Reshoring for Made-in-USA production may also increase in the next two years, the study says.