At the end of last July the United States Fashion Industry Association – USFIA released the seventh-annual Fashion Industry Benchmarking Study, in conjunction with Dr. Sheng Lu, Associate Professor in the University of Delaware Department of Fashion & Apparel Studies.
As supposed, Covid-19 disruptions in sourcing and the uncertainty the Industry is facing weighed on respondents. Sourcing executives show the lowest level of confidence in the five-year outlook since the inception of this report.
One year ago, 64% of survey respondents were “optimistic” or “somewhat optimistic” about the outlook for the next five years. This year that number dropped to 57%, and almost one-third of the respondents said they are “somewhat pessimistic” or “pessimistic”.
Disruption in every area of the supply chain
Meanwhile, 100% of respondents reported “supply chain disruption” as the most significant impact of Covid-19 on their business operations. These disruptions are not concentrated in one area of the supply chain. Many respondents saw disruptions with garment factories that make their products struggling with a labor shortage, contracted garment factories short of textile raw materials or facing a substantial cost increase in shipping and logistics, and barriers to conducting regular factory audits because of Covid-19.
«Securing textile raw materials and production capacity has been highly challenged due to the need to implement extended payment terms, etc.» said one respondent.
The annual USFIA survey includes executives from leading Fashion brands, retailers, importers, and wholesalers covering the business outlook, sourcing practices, utilization of Free Trade Agreements and preference programs, and views on trade policy. This year, in addition to all respondents selling products in the United States, over three-quarters of respondents also sell products in Canada, Western Europe, Mexico, and Asia.