When looking at nearshoring, onshoring and Made in USA fashion products it makes sense to start with imports.

Otexa’s May 2023 US import statistics are out. When measured by square metre equivalents, imports of textiles and apparel from the world are down more than 20% for the first five months of 2023 compared to the same period in 2022. Interestingly, imports from China, India, Vietnam, and Bangladesh have declined by about 30%. Imports from Turkey are down more than 40%. Imports from the Western Hemisphere are up 5% – huh? How can that be?

For sure, the US market is in the dumps. Imports are down virtually everywhere, mostly because there’s weak demand. This isn’t new; the industry has dealt with this reality for quite a while. But what is new is that nearshoring is showing signs of life. In particular, imports from Mexico are up 85%; USMCA (NAFTA v 2.0) is up 67% percent. Yes, imports from CAFTA-DR are down 19%, but that compares to far steeper declines from other major suppliers and is in line with the aggregate global trend. Curiously, imports from Canada are even with last year.

Made in USA and what’s happening closer to ‘home’

All of this leaves me wondering about the state of nearshoring and the Made in USA movement. Has there been a realignment of sourcing closer to home? Does where a fabric or garment is made matter? Answering that question depends upon whom you ask. Talk to an environmentalist, and the answer will be an enthusiastic “Yes!” And they’ll also ask how it is made and with what materials. In turn, ask a sourcing person, and the question may be answered with: “It depends – what’s the cost?”

However, US consumer attitudes are more nuanced. Socioeconomic factors influence consumer purchasing decisions, while anxiety about the future, global conflicts (like Ukraine), and pervasive uncertainty weigh on consumer willingness to buy stuff. It’s complicated. And when guessing what our industry’s prospects will be in a month, six months, a year, or five years, assessing consumer attitudes become critical. After all, consumers are the ultimate customer.

Is there demand for Made in USA products?

Nevertheless, according to one research firm, consumers have clarified their intentions. “US consumers’ demand for ‘Made in America’ products is robust,” says Morning Consult, a nonpartisan polling and research firm based in Washington, DC, in its newly published ‘Made in America’ survey.

In fact, a recent article in the New York Times cited the survey in the context of a fast-selling $60 Made in USA tshirt from American Giant, the San Francisco-based clothing company. American Giant’s success may not be a one-off thing but rather part of a broader pattern of consumer behaviour. “65% of US adults said they intentionally bought ‘Made in America’ products over the past year. That’s about the same rate of US adults who said they had those intentions last year,” said the New York Times referring to the Morning Consult survey.

Morning Consult’s survey offers insight into macro-forces affecting consumer preferences and sheds light on demographic trends and political characteristics. Many such consumer studies focus on economic factors – such as inflation, job security, etc. But with this survey, preferences by political party (Republican, Democrat, Independent) are also considered. Indeed, such assessments are not without pitfalls; for instance, it will be interesting to see if a survey such as this makes its way into the mudslinging of the 2024 election. Political concerns notwithstanding, the survey identifies gender and generational attitudes toward “Made in America” and price sensitivity.

How US consumers react to Made in USA

Some of Morning Consult’s findings are consistent with other research surveys, but some are new – and are quite pointed. Let’s look at some of the highlights from the executive summary of the “Made in America” survey:

1.  US consumers look for Made in USA

About three-quarters of US consumers say they intentionally looked for “Made in America” products, with republicans and baby boomers more inclined to search for domestically-made products than democrats and younger generations.

2.  Recent economic troubles have not affected consumer attitudes toward Made in America

Although domestically-made products may cost more, surveyed consumers said they continue to search for them over foreign-made merchandise. In fact, consumer interest in Made in America products has remained steady from 2022 to now despite higher inflation and rising interest rates squeezing consumer wallets.

3.  Willing to pay more – but only up to a point

Consumers said they are willing to pay more for domestically-made products, but only to a certain degree. Explained Morning Consult, “Nearly half of US adults say they would pay more for ‘Made in USA’ goods. But price hesitancy will constrain companies’ ability to upcharge: Among US consumers who said they would pay more, a majority are unwilling to pay above 10% extra for ‘Made in America’ goods relative to foreign-made equivalents.”

4.  Nationalism plays a role for some consumers

For some consumers, purchasing decisions favouring “Made in America” reflect patriotic sentiments. Morning Consult says: “Marketing campaigns that prime nationalist sentiment — specifically by emphasising how “Made in America” supply chains can create and protect US jobs — will most help win over consumers.” The survey indicated that nationalism plays a greater role with republicans and baby boomers than democrats and gen z adults.

5.  Reshoring out of China will yield large reputational gains for US multinationals

Surveyed consumers favourably view US multinational companies that reshore production that replaces Chinese labour and/or parts in their supply chains with domestic inputs. “Seven in 10 US adults said they hold favourable views of US companies that incorporate domestic labour and parts into their supply chains, compared with just 29% who said they hold favourable views of those using only Chinese inputs,” reports Morning Consult.

6.   US companies that reshore have a competitive edge relative to foreign ones that onshore

According to the survey, “larger shares of US consumers are willing to pay more for reshored goods produced by US companies compared with onshored goods produced by foreign ones.”

7.   Foreign multinationals hailing from US allies and ‘friendly’ countries have a leg up compared with others

Morning Consult explains: “Among foreign multinationals, those hailing from US allies and ‘friendly’ nations have a better chance of seizing market share. Russian and Chinese companies are highly disadvantaged by these geopolitical dynamics and will struggle to gain traction.”

Sentiments versus reality?

“Men, baby boomers, republicans and consumers who are proud to live in the United States offer ready-made markets,” concludes Morning Consult. This is not to say that other market segments are not interested in “Made in USA.” After all, patriotic sentiments transcend political affiliation, gender, and demography only that certain market segments will be innately more receptive to that message than others. Moreover, job creation remains front of mind for most consumers, young or old, Republican or Democrat. “Made in America” taps into consumer sentiment supporting greater domestic employment.

Even so, this needs to be qualified. Let’s get real here: price sensitivity has to be considered. There is a limit to what consumers are willing to pay regardless of where a product is made. Many surveys have accurately reported consumer interest in buying domestically-made products, only to discover that such intentions dissipate once consumers enter a store and focus solely on price. It’s a conundrum for advocates of “Made in America.”

This leaves us where we began: US apparel imports slumped again in May, a clear sign that the market remains soft. But for one company with an appealing message, selling tshirts with an “American Made” logo, knitted with American-made textiles, and sewn in the US, seems to be bucking the trend. Of course, the big question is if the “Made in America” phenomenon is temporary or the beginning of something more permanent.