Apparel spending, consumer confidence see gains in October: Cotton Inc

Notably, the current price levels for clothing are 7.6 per cent higher than the average recorded in 2019, underscoring sustained price growth in the sector.

After record-setting peaks in 2022, import prices for cotton-dominant apparel have recently stabilised. Current prices are averaging around $3.70 per square meter equivalent (SME), down from the peak of $4.26/SME in November 2022. However, these prices remain above pre-pandemic levels, which averaged $3.45/SME in 2019. This stability in import prices may influence future retail pricing trends as the industry adjusts to the current economic environment, said Cotton Incorporated in its Executive Cotton Update – US Macroeconomic Indicators & the Cotton Supply Chain, November 2024.

Consumer confidence, as measured by the Conference Board’s Index, surged 9.5 points to 108.7 in October—its highest level since January 2024. This increase is a positive sign, although the index remains within the range (95 to 115) that has been typical since mid-2021. Meanwhile, overall consumer spending recorded a month-over-month increase of 0.4 per cent in September, with a year-over-year (YoY) rise of 3.1 per cent—the strongest annual growth since December 2023.

Spending on apparel specifically followed this trend, climbing 0.4 per cent month-over-month and 1.7 per cent year-over-year. However, the annual growth in apparel spending has slowed from the 4.2 per cent year-over-year increase seen in July.

The International Monetary Fund (IMF) released updated forecasts in late October, predicting that global GDP growth will remain steady at 3.2 per cent in both 2024 and 2025. This mirrors the growth seen in 2023 (3.3 per cent), signalling a stable but sluggish economic outlook.

In the US, economic growth continues to surpass expectations, with forecasts revised upwards for 2024 and 2025 to 2.8 per cent and 2.2 per cent, respectively. This follows a robust 2.9 per cent growth in 2023 and an average of 2.6 per cent in the five years prior to COVID-19 (2015-2019).

The euro zone, however, faces more modest prospects. Following an average growth rate of 2.0 per cent between 2015 and 2019, economic expansion dropped to 0.4 per cent in 2023. The IMF projects growth rates of 0.8 per cent and 1.2 per cent for 2024 and 2025, respectively. Meanwhile, China’s growth is expected to decelerate from its pre-pandemic average of 6.7 per cent (2015-2019) to 5.3 per cent in 2023, and further to 4.8 per cent and 4.5 per cent in 2024 and 2025. Long-term projections indicate growth tapering to 3.3 per cent by 2029, as per the Executive Cotton Update.

US job growth in October fell short of expectations, with just 12,000 new jobs added—the smallest increase since December 2020. This decline is attributed in part to Hurricane Helene and ongoing strike actions. Additionally, revised figures for August and September were downward-adjusted by a total of 112,000 jobs. Despite these setbacks, the unemployment rate remained stable at 4.1 per cent, a relatively low figure by historical standards.

Wages continued their upward trend with a 4.0 per cent year-over-year increase in October. Although wage growth has slowed from a peak of 5.9 per cent in March 2022, it has shown signs of stabilisation since July 2024, when it hit a low of 3.6 per cent. Notably, wage growth has outpaced inflation since early 2023, providing some relief for workers amid rising living costs.

Fibre2Fashion News Desk (KD)