Output at U.S. textile plants increased by 2.1% from December 2004 to December 2005, the Fed said Tuesday. Meanwhile, production at apparel factories increased 0.9% year-over-year. It was the first time since 1996 that both textile and apparel production had increased in the same year. See full story.
U.S. production jumped in the second half of 2005, after the U.S. government imposed "safeguard" limits on some Chinese textile imports.
The United States and China reached a comprehensive agreement in November that placed quotas on 34 products after a previous global agreement expired. Imports of some kinds of Chinese textiles soared by 50% in the first half of the year.
Lloyd Wood, a spokesman for the American Manufacturing Trade Action Coalition, is convinced that the new accord boosted the textile industry out of a depression.
"There's no question that this has played a big role," Wood said.
Charles W. McMillion, president of MBG Information Services, a Washington-based business analysis firm, said he is advising clients to focus on the second-half figures.
"I think what the numbers show is that the administration's safeguards in the middle of the year have had some strongly beneficial effects," McMillion said.
For an industry that has been struggling, McMillion said the output figures are promising because they show that effective remedies are available.
He said for companies that are trying to keep their competitive edge, it's hard to continue to invest in new products and technology when profits are sliding.
"This gives them a little breath. At least this strongly suggests that trade action can help production in the short term," McMillion said. "Tune in again in three or six months and we'll see what happens there."
The U.S. textile and apparel industries have been struggling for decades. The sector has lost more than 650,000 jobs since 1994.
Federal Reserve data showed that U.S. textile output is down 33.8% from its peak in December 1997. Output in December matched levels seen in January 1968.
Apparel prices, meanwhile, have fallen 10.5% since the end of 1997, as cheap imports have replaced American-made clothing.
