
American fashion companies are shifting their operations away from China. In Sourcing Journal, Chelsea Dobrosielski reports that a survey of the fashion industry conducted by USFIA found that this year’s survey, the tenth so far, “saw the percentage of respondents no longer usingย China as their top supplier hit a record high in 2023: 61 percent.” She continues:
Only 50 percent said the same last year, which itself was a giant leap from the pre-pandemic normal of 25 percent to 30 percent.
Meanwhile, nearly 80 percent of respondents said they plan toย reduce sourcing from Chinaย over the next two years. A record high of 15 percent plan to โstrongly decreaseโ sourcing from the country. Large-size U.S. fashion companiesโaround 77 percent of respondents reported having more than 1,000 employeesโthat currently source more than 10 percent of their products from China were โamong the most eager toย de-risk,โ the report said.
Lowering โChina exposureโ will remain challenging in terms of textile raw materials, however, the USFIA noted. More than 70 percent of respondent said they currently source various yarns, fabrics and textile accessories from China โwith no practical alternatives,โ the report said.
Though โfinding a newย sourcingย baseย other than Chinaโ ranked fourth among respondentsโ top business challengesโa sharp increase from 11th in 2022โโmanaging the forced labor risks in the supply chainโ took second place. The heightened concern comes a year into the implementation of the Uyghur Forced Labor Prevention Act (UFLPA). The most common responses toย forced labor risksย and theย UFLPAโs implementation included โasking vendors to provide more detailed social compliance information,โ โattending workshops and other educational events toย understand related regulations better,โ and โintentionally reducing sourcing from high-risk countries.โ
Concern has centered on cotton products in particular, the report noted. Nearly 86 percent of respondents said they have or plan toย reduce sourcing cotton apparelย from China, while 55 percent said the same for non-cotton apparel from China.
The top concern identified in the USFIA survey was inflation and the U.S. economic outlook, however. Half of respondents said they expect their apparel sourcing value or quantity to increase this year, down from 90 percent last year. Most, 69 percent, expressed optimism or cautious optimism for the U.S. fashion industry in the next five years. Even more, 85 percent, plan to increase hiring over the next five years.
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