|(United States Of America)|
The ‘Made in China’ downturn is fast gaining pace with manufacturers considering moving to US for production, thanks to the declining cost of US energy due to its new gas and oil fracking breakthroughs and rising wage costs in the Asia’s largest economy.
A recent report from the Boston Consulting Group, (BCG) revealed that the US will move closer to China in terms of production costs. Furthermore, the report also said that, by 2015, the US production costs will fall between 8-18 per cent, much below the costs of other major countries including Germany, Japan, the United Kingdom, France and Italy.
The green shoots of revival in the American textile industry are already visible from the earnings of major American textile firms in the second quarter. Strong evidence to this matter comes from Uncle Sam’s second quarter 2013 numbers which put the US Textile industry’s net profits at USD 505 million, up 31 per cent over the corresponding period of previous year.
Also domestic apparel manufacturers have recorded a growth of around 14 per cent in the second quarter over the year ago period. On margins front, textile mills have also recorded a growth of 100 basis points over the comparable period of last year.
On the other hand, growth of China's textile industry slowed in the first five months of the year, the reports suggest. Statistics from the General Administration of Customs revealed that China’s export value of textiles and garments for June was USD 24.1 billion-- 8.5 percentage points lower than in the first five months of 2013.
There’s more good news for the US textile industry—the trend is likely to continue going ahead too, driven by improved pace of economic growth. The US economy expanded at 2.8 per cent in the third quarter ended September 2013 as against the expectations of 2-2.2 per cent by analysts. Moreover, trend also suggests that the US labor and material costs will remain under control as compared to China, once favored for its low costs.
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