How have China’s textiles manufacturers been impacted by COVID-19?
Overall, the COVID-19 disruption has been fairly limited in Mainland China. Factories resumed operations as early as March 2020 and have continued to operate since then. That said, worker testing and regional restrictions have resulted in delays for a fair number of our customers.
Keep in mind that the textiles industry is highly interconnected. Delays caused by shutdowns in one province (or another country for that matter) can delay fabric and garment accessories deliveries – which has a direct impact on your lead times.
Is China still competitive in clothing manufacturing?
The main competitive edge of the Chinese garment industry is the fact that they have overall remained open. Some buyers were forced to shift orders back to Mainland China after their suppliers in India and Vietnam had to close down as a result of the 2021 outbreaks.
That being said, both Vietnam and India have since resumed operations.
How have the increased shipping costs affected clothing manufacturers?
Shipping costs from Asia to Europe and North America have increased by as much as 10 times. Garments, which are high in volume, are normally shipped by sea – which has resulted in profits being decimated by many brands and importers.
As a result, a significant number of our customers started buying from clothing manufacturers in Europe, Turkey, and Mexico in 2021. While it’s still more expensive to manufacture textiles in, for example, Europe compared to China, the freight rates alone drive the landed unit costs to levels that the two are comparable.
We expect this trend to continue for as long as the shipping costs remain as insanely high as they currently are.
Further, the shipping costs are not only impacting clothing manufacturers in China though. Suppliers in other Asian countries also face the same situation.