Apparel Wholesalers NAICS 424350

May 29, 2025 - Slower Growth Forecast

• The US apparel wholesalers industry is projected to grow at a 0.13% CAGR from 2025 to 2029, slower than the overall economy's projected growth, according to a forecast from Inforum and the Interindustry Economic Research Fund, Inc. The retail and wholesale sectors are driven by consumer spending, along with expenditure by businesses and government. Retail spending could soften with the growth of spending on consumer services. Another factor that may limit consumer spending is higher tariffs on consumer goods. In 2025 and into the forecast period, real disposable income may be supported by continuing nominal wage growth, lower inflation rates, and higher employment levels. Lower inflation supports a moderate increase of real disposable income by about 2% in 2025 and 1.9% in 2026. Real income could suffer if prices rise due to tariff implementation.
• According to a new survey from the National Association of Wholesale-Distributors (NAW), tariffs are driving cost increases and creating operational challenges across the wholesale distribution industry. The survey was done in collaboration with Modern Distribution Management (MDM) Research. About a third of distributors say they face price increases of 25% or higher. According to Eric Hoplin, NAW’s CEO, “Though these increases haven’t hit store shelves yet, it’s an indication of where prices are headed.” About 62% of distributors expect their cost of goods will rise by 10% or more in 2025, while 67% of respondents report a negative impact on their business. Nearly 40% of respondents said more than 20% of their inventory originates in China, and only 17% can shift to domestic or non-impacted suppliers. Operational actions being taken by distributors include slowing inventory replacement (48%), delaying new hiring (44%), cutting capital investments (37%), and reducing discretionary spending (60%).

• 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 new tariffs levied on China, Mexico, and Canada 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.
• According to the Global Port Tracker report from the National Retail Federation (NRF) and Hackett Associates, import cargo at major US container ports is expected to see its first year over year decline in more than a year and a half in May 2025, projected to decrease nearly 13%, due to tariff turmoil. Imports are expected to be down at least 20% year over year from June 2025 into the fall, and volume for the year could fall by more than 10%. A series of tariffs imposed by the Trump administration since February have come at a key time in the buying process for retailers, with many retailers pausing or canceling orders as a result. Jonathan Gold, NRF VP for Supply Chain and Customs Policy, said the effects of the tariffs on the supply chain are becoming apparent, noting, “From national security tariffs on Canada, Mexico and China to global and reciprocal tariffs on all countries and a multitude of tariffs on specific sectors, the results will include higher costs for businesses as well as reduced cargo volumes. In the end, these tariffs will affect consumers in the form of higher prices and less availability on store shelves.” Tracker data showed that US ports handled 2.1 million 20-foot equivalent units (TEU) in March 2025, up 11.1% year over year, and a projected 2.2 million TEU in April 2025, expected to be up 9.1% year over year.