Yarn and fibre prices have flown by values before the outbreak (the average for the A Index was up 65 per cent in December 2021 versus February 2020, the average for Cotlook’s yarn index was up 45 per cent over the same period).
Statistically, the strongest correlations between fibre prices and apparel import costs are around nine months. This suggests that the surge in cotton prices that began in late September should continue to pull import costs higher for another five to six months. Higher sourcing costs could eventually lift retail prices beyond pre-pandemic levels.
Overall consumer spending was essentially flat month-over-month in November (+0.03 per cent). Year-over-year, overall spending was up 7.4 per cent. Apparel spending was down month-over-month in November (-2.6 per cent). This was the first month-over-month decrease in three months (was -2.7 per cent in July and averaged 1.6 per cent month-over-month growth from August through October).
Year-over-year, apparel spending was 18 per cent higher in November. Relative to the same month in 2019 (pre-COVID), apparel spending was up 22.9 per cent. The long-term average annual growth rate in spending on clothing is 2.2 per cent (2003 through 2019), so recent growth in apparel spending is exceptional, according to the Cotton Incorporated report.
The Consumer Prices & Import Data (CPI) for apparel increased in November (latest available). Month-over-month, retail prices were 1.5 per cent higher. Year-over-year, prices were 5 per cent higher. Despite monthly increases in seven of the past eight months, average retail prices are still lower than before the pandemic (-1.7 per cent in November 2021 versus February 2020, seasonally-adjusted data).
Fibre2Fashion News Desk (KD)