Business Bayani PH

The global clothing and shoe industry is going through a tough time with slow sales and a pile-up of unsold items. In a report by S&P Global, financial experts predict a small growth of 2.5% in the last quarter of 2023 and 2.1% in the first quarter of 2024. This makes it crucial to manage the supply chain effectively.

Many US clothing stores have more stuff in their stock than they’re selling. A review of 19 clothing companies shows they are struggling to get their stock levels back to normal. In calls from this quarter, over half of these companies talked about how having too much stock is hurting their earnings and cash flow, the highest level since mid-2022.

Looking at the materials used to make clothes, the cost of cotton and fake fibers has gone up and down. Even though it costs less to make clothes, prices for us are not going down much. In the past year, clothes’ prices went up by 2.7%, and it is expected to go up by just 1.5% by the end of 2024. Cotton prices might go down, but fake fiber prices are likely to go up.

Things are getting back to normal for getting clothes from one place to another. But the number of clothes coming to the US on ships has dropped by 18% compared to last year. 

This shows a big slowdown in how clothes are moving around. In October, the number of clothes brought in was the lowest since at least 2017. Worldwide, the amount of clothes traded is expected to drop compared to last year, but it should start going up again in the second quarter of 2024.

But there are problems for the clothing industry. There might be issues with ships getting through important canals, like the Panama and Suez Canals. Also, there’s a need to get rid of harmful chemicals from fake fibers. And in Bangladesh, where 20% of our clothes come from, there are strikes causing trouble.

Trouble in Bangladesh: Strikes and More

Bangladesh has been having problems since November with people protesting against the government and transportation strikes all over the country. This is expected to get worse before the January 2024 election, causing problems everywhere.

Workers in Bangladesh who make clothes have also gone on strike, asking for more money. They’ve got an increase in their minimum wage to 17,000 Bangladeshi taka ($154) a month, up from 8,000 taka before. This led to about 300 factories going on strike in November.

Even though Bangladesh has been growing its clothes exports by 5.3% every year, it’s facing a lot of problems, including strikes, climate issues, terrorism, and big accidents in factories. They’ve been doing well because they’re making clothes for us instead of just China. They’re expected to grow even more, by 6.8% every year in the next five years, as long as things stay the same.

Despite being cheaper, Bangladesh’s clothes industry has risks. If the minimum wage goes up, it might not be as cheap anymore. And there’s a higher chance of strikes and other problems compared to other places. They’ve also had to deal with climate change, terrorism, and big accidents in the past.

With the clothing industry facing tough times, it’s important to keep an eye on how things are going. The supply chain needs to work well, especially with challenges both near and far. Whether you’re a shopper or a business, staying informed is key.◼