Apparel Manufacturers NAICS 3152

May 28, 2025 - Slower Growth Forecast

• The US apparel manufacturers industry is projected to grow at a CAGR of 0.33% between 2025 and 2029, slower than the overall economy's anticipated growth, according to a forecast from Inforum and the Interindustry Economic Research Fund, Inc. Consumer sentiment is expected to improve in the forecast period, which bodes well for the sector. A factor that may curb consumer spending is substantially higher tariffs on consumer goods. Lower inflation supports a moderate increase of real disposable income by 2% in 2025 and 1.9% in 2026. Real income could suffer if average prices rise due to tariff implementation. The nondurable goods manufacturing sector forecast indicates that the labor force is expected to diminish. However, new technologies could support labor productivity for the industry. Apparel and leather, textiles, paper, and printing production saw substantial losses between February 2020 and December 2024. Some of these segments were already declining before the pandemic.
• The apparel, leather, and allied products segment was one of the 11 manufacturing categories reporting growth in April’s Manufacturing ISM Report on Business. The apparel, leather, and allied products segment reported higher employment, an increase in new orders, and lower order backlogs. In addition to the apparel, leather, and allied products segment, industries reporting growth in April included Petroleum & Coal Products; Plastics & Rubber Products; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Nonmetallic Mineral Products; Miscellaneous Manufacturing; Machinery; Chemical Products; Textile Mills, and Primary Metals. Manufacturing industries reporting contraction during the period included Furniture Products; Wood Products; Paper Products; Food, Beverage & Tobacco Products; Transportation Equipment; and Fabricated Metal Products. Overall, economic activity in the manufacturing sector contracted for the second consecutive month in April, with the Manufacturing PMI registering 48.7%.

• According to Sourcing Journal, US-based apparel manufacturers face higher prices on foreign-made inputs, loss of business in sectors affected by duties, and waning goodwill from non-US customers thanks to a range of new tariffs levied on China and other countries by the Trump administration. On a positive note, Mitch Gambert, CEO of Gambert Shirtmakers, said he has seen about a 20% increase in interest from brands and retailers looking for domestic sourcing. However, costs in key areas have increased due to tariffs. Gambert is paying an additional $5,400 on each order of 5,000 buttons sourced from China. When a Canadian fabric wholesaler implemented a 33% surcharge on all shipments, Gambert had to cut 50 fabric options from the portfolio and cancel already-placed orders. US apparel manufacturers are also concerned with higher costs for machinery, most of which are sourced from Asia or Europe.
• Consumers may adjust their apparel spending as consumer sentiment, an indicator of discretionary spending, continues to fall in large part due to tariff uncertainty and an expectation of higher prices, according to two major indicators. The final index of consumer sentiment from the University of Michigan dropped 8% in April 2025 from the previous month, according to CFO Dive. An index measuring consumers’ expectations for the future fell nearly a third since January, the steepest three-month percentage decline since the 1990 recession. According to survey director Joanne Hsu, “Consumers perceived risks to multiple aspects of the economy, in large part due to ongoing uncertainty around trade policy and the potential for a resurgence of inflation looming ahead.” The Consumer Confidence Index declined by 7.9 points in April 2024, compared to the previous month. Consumer confidence levels have fallen for five consecutive months, reaching levels not seen since the beginning of the COVID pandemic, according to The Conference Board, which publishes the monthly index.