Demand for apparel in the U.S market will remain muted in calendar 2023 and is likely to rebound in 2024, forecasts Siva Ganapathi, Executive Vice-Chairman, and MD, Gokaldas Exports, the country’s largest manufacturer and exporter of apparel.
‘I am anticipating the demand to be somewhat muted in calendar 2023 with a rebound in 2024 calendar, so until spring (February to April), we will have to manage with a subdued demand in the U.S,’‘ he told The Hindu.
The U.S. market was doing pretty much fine in calendar 2022, it had an inflation-led, price-led growth, although not a volume-led growth. Due to rising oil prices and general inflationary trends in the market and prices overall went up. As a result, apparel prices too went up by 7% in 2022, according to him.
“In 2023, so far, the consumer markets have been good and people are buying garments. But it’s been a bit of a trade down,’‘ he said. Some reports indicate that Walmart is seeing higher sales because people are trading down from higher brands to Walmart.
Mr .Ganapthy further said the U.S. apparel brands currently have some excess inventory as they overbought in 2022 in anticipation of high growth, but the demand has not been as high from a volume perspective. Therefore, most U.S brands were going slow on buying this year,2023 he added.
However, he clarified that Gokaldas Exports has not seen a decline or a setback as yet, although most other brands have.
Further in his commentary, Mr. Ganapathi said Europe still remained somewhat muted given the Ukraine war while China may witness some traction of incremental buying with the country opening up now after stringent pandemic restrictions.
“So, there may be some growth coming in China and maybe smaller growth in Europe as the war has become routine there and the region started sort of pivoting away from Russia. The western markets are expected to rebound by 2024. The U.S., Europe, and China are the top three markets for apparel globally and this is what these global markets look like currently,’‘ he explained.
Overall, most apparel manufacturers and exporters are preparing for a soft demand going forward as the U.S. Fed’s tightening of interest rates would come with some degree of a lag effect, with some impact on consumer purchases.
“I’m hoping that by the second half of the next financial year, we should start seeing a resurgence in demand,’‘ Mr. Ganapathi added.
