Home biz leads textiles: ATMI study

Don Hogsett, January 27, 2003

Getting a big lift from a remarkably resilient home textiles and carpet sector, overall sales and profits of U.S. textiles and apparel producers both made gains last year, climbing back on track after years of punishing weakness.

But the gains were tightly focused on products for the home last year, and the apparel, fabric and yarn segments remained weak, putting a cap on overall industry results, according to an annual industry re-cap prepared by the American Textiles Manufacturers Institute (ATMI).

Overall textiles and apparel industry sales ratcheted up by 1.7 percent last year, to $36.8 billion from $34.5 billion in 2001, the ATMI reported. And overall industry profits, while still relatively anemic, rebounded to $1.0 billion from $200 million the prior year. But even with the big gain, the textiles industry lagged far behind the rest of American manufacturing when earnings are measured as a percentage of sales — just 2.1 percent for textiles, compared with 3.6 percent for all U.S. manufacturing.

Underlining the continuing strength of the home business, shipments of cut-and-sewn home fashions products, along with carpeting and miscellaneous textiles — all included in federal classification NAICS 314 — jumped up by almost seven percent in 2002, to $36.8 billion from $34.5 billion last year. That was the good news. The problem is that shipments of yarn, fabric, and finishing, mostly apparel, — all under federal classification NAICS 313 — dropped off by 4.9 percent, to $42.7 billion from $44.9 billion. It was a seventh straight annual decline for apparel-related goods, which have declined every year since peaking in 1995.

But even the picture for the narrow textiles business — including home, but excluding apparel — was mixed, with imports rocketing up, putting continued and unrelenting pressure on overall textile industry employment, which declined by ten percent last year. During 2002, the ATMI reported, employment in the textile and apparel industry fell to an average of 432,000 workers, a one-year loss of 46,000 jobs. That was twice the size of the five-percent drop in employment for the rest of American manufacturing.

Acting as a drag on employment, U.S. textiles and apparel imports jumped up by 12.2 percent last year, to 36.8 million square yards from 32.8 million square yards. As home fashions companies step up off-shore sourcing, textile imports alone, excluding apparel, rocketed up by 20.2 percent, to $20.1 million from $16.7 million.

In an era of increasing price deflation — a combination of hard-nosed retailers and low-cost imports — it will come as no surprise that the Producer Price Index for textiles declined by 1.6 percent last year. But others had an even harder time last year, and the Producer Price Index for all commodities fell even further, by 2.3 percent.

Hammered by an over-valued U.S. dollar, domestic producers had a tough time shipping U.S. goods abroad. Overall textile and apparel exports fell 5.5 percent, but exports of textiles, including home, managed to hold their own, slipping by just 0.3 percent.

U.S. textiles still a mixed bag
Home goods outperform the overall industry
Textile industry benchmarks, 2001-2002

2002 2001 % change
Source: American Textile Manufacturers Institute (ATMI)
All 2002 data are estimated form latest year-to-date information supplied by the Federal Reserve, U.S. Department of Commerce, the U.S. International Trade Commission and the Bureau of Labor Statistics.
a-Using federal classification NAICS 313, which includes yarn, fabric and finishing.
b-Using federal classification NAICS 314, which includes cut & sewn home textiles products, carpet, tire cord, rope & cordage, industrial textile products and miscellaneous textile products.
c-Combined NAICS 313 and 314.
Shipments ($billions)
Textile millsa $42.7 $44.9 -4.9%
Textiles products, including homeb 36.8 34.5 +6.7
Mill fiber consumption (billions of pounds) 4.5 4.9 -7.4
Corporate sales ($billions)c 48.0 47.2 +1.7
After-tax profits ($billions)c 1.0 0.2 +400.0
Earnings on sales (percentage of sales)
Textilesc 2.1 0.4
All U.S. manufacturing 3.6 0.8
Employment (annual average in thousands)
Textiles 432.0 478.0 -9.6
All U.S. manufacturing 16,725.0 17,695.0 -5.5
Average workweek in hours 41.2 40.0 +3.0
Hourly earnings (annual average $s) 11.74 11.36 +3.3
Weekly earnings (annual average $s) 484.06 453.58 +6.7
Index of hours worked (1982=100)
Textiles 61.1 66.4 -8.0
All U.S. manufacturing 92.5 98.0 -5.6
Producer Price Index (1982=100)
Textiles 121.1 122.7 -1.3
All commodities 131.1 134.2 -2.3
Textiles/apparel imports ($millions customs) $79,648.0 $79,471.0 -0.9
Textiles only $15,702.0 14,613.0 +7.5
Textile/apparel exports ($millions) $15,705.0 16,611.0 -5.5
Textiles only $10,047.0 $10,079.0 -0.3
Textile/apparel trade balance ($millions) ($62,125.0) ($61,964.0) +0.3
Textiles only ($millions) ($5,655.0) ($4,534.0) +24.7
Textile/apparel imports (million sq. yards) 36,814.0 32,808.0 +12.2
Textiles only 20,080.0 16,704.0 +20.2
Index of Asian currencies (1996=$1.00) $0.62 $0.60 +3.3

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