Although the growth of clothing exports to the US is not high, the upward trend is encouraging, say many leading market analysts, who optimistically think consignments from Vietnam to the US could jump overall 10% for the whole of 2016.
Achieving 10% growth is still possible, says Vo Tran Thi Huyen, plant manager at Tex-Giang JSC, as work orders are coming in bulk and for higher value-added apparel items this year.
However, the bulk of the growth in the ratio of US imports from Vietnam as a percentage of total imports will come in large part by way of a reduction of the ratio of imports into the US market from China.
Year-to-date through July, worldwide imports of clothing into the US have actually shrunk by 4.98% to US$60.23 billion from US$63.39 billion for the corresponding seven-month period in 2015.
Of the top 10 markets that the US imports garments from, only Vietnam and Bangladesh showed growth in import consignments of 1.83% and 1.12%, respectively, for the period.
Markets showing a year-on-year drop in imports into the US market for the seven-month period included China down 8.49% to US$21.39 billion, India minis 0.97% to US$4.39 billion and Pakistan lower by 10.67% to US$1.59 billion.
Spending by US consumers declined slightly in July, while department store sales also fell from a year ago, according to Business Insider. US companies blamed a variety of temporary factors such as delayed inventory shipments, bad weather, and fewer international tourists for the slowdown.
However, Business Insider reports that Americans are increasingly spending less on clothes and home furnishings, a trend that could hurt the Vietnam clothing exporters in years to come.
While lower gas prices mean US consumers theoretically have more disposable income, the US Department of Commerce recently reported that retail sales were flat as shoppers have other priorities.
A recent report by Morgan Stanley shows that millennials are spending more on expenses like rent, mobile phones, and personal services than young people a decade ago. This leaves less money for buying clothes, said Business Insider.