Where Industry and Security Intersect
What's New | Sitemap | Search
This chapter discusses the contributions made to the U.S. economy by the textile and apparel industries. It reviews the industries’ contribution to U.S. Gross Domestic Product (GDP), their contributions to other industries, their contributions to U.S. employment, and finally their contributions to research and development (R&D).
For more than half a century, the textile and apparel industries have made important but steadily declining contributions to the U.S. GDP. Figure II-1 and Table II-1 indicate the percentage contributions to GDP by these two industries. Textile industry contributions peaked in 1948, reaching approximately 1.95 percent of GDP. The apparel industry’s peak contribution occurred in 1947 and 1948, when it contributed 1.36 percent to GDP each year. By contrast, in 2001 the textile and apparel industries contributed 0.22 percent and 0.23 percent of GDP, respectively. Until 1954, textiles contributed more to GDP than apparel. Starting in 1956, a reversal occurred when apparel’s contribution to GDP exceeded that of textiles, a condition that remains today.
Figure II-1. Textile and Apparel Contribution to GDP 1947-2001
Source: U.S. Department of Commerce, Bureau of Economic Analysis
Table II-1 also compares the percentage contribution to GDP for all manufacturing, the production of non-durable goods (food, gasoline, coal, and other), the individual contributions of textiles and apparel, and their combined contribution. The combined contribution to GDP of the textile and apparel industries declined from 2.80 percent in 1950 to 0.45 percent in 2001. The percentage change in contribution has been much greater for the textile and apparel industries than for manufacturing overall or even all non-durable goods. Since 1950 (see Table II-2), manufacturing’s contribution to GDP has declined by 50.6 percent, while the combined textile and apparel contribution to GDP has declined by 83.9 percent.
Table II-1. Percentage of GDP |
|||||
| Year | Manufacturing | Non-durables | Textile | Apparel | Combined Textile and Apparel |
|---|---|---|---|---|---|
| 1950 | 28.59% | 12.98% | 1.57% | 1.23% | 2.80% |
| 1960 | 27.03% | 11.35% | 0.91% | 0.96% | 1.87% |
| 1970 | 24.03% | 9.92% | 0.82% | 0.87% | 1.69% |
| 1980 | 21.01% | 8.47% | 0.53% | 0.62% | 1.15% |
| 1990 | 17.93% | 7.82% | 0.38% | 0.44% | 0.82% |
| 2000 | 15.47% | 6.45% | 0.24% | 0.25% | 0.49% |
| 2001 | 14.11% | 6.05% | 0.22% | 0.23% | 0.45% |
| Source: U.S. Department of Commerce, Bureau of Economic Analysis | |||||
Table II-2. Change in Percentage of GDP Since 1950 |
||||
| Manufacturing | Non-durables | Textile | Apparel | Combined Textile and Apparel |
|---|---|---|---|---|
| -50.6% | -53.4% | -86.0% | -81.2% | -83.9% |
| Source: U.S. Department of Commerce, Bureau of Economic Analysis | ||||
The textile and apparel industries are linked to many other sectors in the economy. Generally speaking, they have a backward link to the industries that supply their raw materials and a forward link to industries that deliver the final goods to consumers. When the textile and apparel industries grow, they provide an economic stimulus for many other sectors of the economy. The impact of such stimulus is captured in industry multipliers generated by the Department of Commerce’s Bureau of Economic Analysis (BEA). The BEA computes industry multipliers to measure the total economic impact, direct and indirect, of a particular industry. For 1999, the most recent year for which this data is available, the industry multipliers are as they appear in Table II-3, below.
Table II-3. Industry Multipliers (1999) |
||
| Industry | Percent of GDP | Total Industry Multiplier |
|---|---|---|
| Agricultural | 0.4% | 2.31 |
| Manufacturing | 18.1% | 2.26 |
| Construction | 9.1% | 2.08 |
| Transportation, communication, and utilities | 6.7% | 1.91 |
| Services | 25.5% | 1.70 |
| Trade | 12.8% | 1.59 |
| Finance, insurance, and real estate | 17.5% | 1.53 |
| Other | 10.0% | 1.15 |
| Source: U.S. Department of Commerce, Bureau of Economic Analysis, Annual Input-Output Model 1999 | ||
The manufacturing industry, for example, has a multiplier of 2.26. This means that a $1 increase in manufactured goods production directly and indirectly benefits economic performance by $2.26. As shown in Table II-3, manufacturing industries, given their many stages of production, provide higher multiplier effects than services industries.
Table II-4 shows the top 15 segments of all industries with the highest multipliers as of 1999. Four textile and apparel segments are included in this top 15 list. The largest of these segments, in terms of its contribution to GDP, is the apparel segment, which has a multiplier of 2.55.
Table II-4. Industry Segment Multipliers (1999) |
|||
| Rank | Industry Segment | Percent of GDP | Total Segment Multiplier |
|---|---|---|---|
| 1 | Gas production and distribution (utilities) | 0.4% | 3.20 |
| 2 | Metal containers | 0.0% | 2.95 |
| 3 | Petroleum refining and related products | 0.8% | 2.92 |
| 4 | Livestock and livestock products | 0.0% | 2.89 |
| 5 | Motor vehicles (passenger cars and trucks) | 2.8% | 2.88 |
| 6 | Footwear, leather, and leather products | 0.0% | 2.78 |
| 7 | Food and kindred products | 3.3% | 2.62 |
| 8 | Apparel | 0.5% | 2.55 |
| 9 | Computer and office equipment | 0.6% | 2.51 |
| 10 | Crude petroleum and natural gas | -0.6% | 2.50 |
| 11 | Broad and narrow fabrics, yarn, and thread mills | 0.0% | 2.47 |
| 12 | Miscellaneous textile goods and floor coverings | 0.1% | 2.46 |
| 13 | Truck and bus bodies, trailers, & motor vehicles parts | 0.2% | 2.45 |
| 14 | Plastics and synthetic materials | 0.1% | 2.42 |
| 15 | Primary nonferrous metals manufacturing | -0.1% | 2.40 |
| Source: U.S. Department of Commerce, Bureau of Economic Analysis, Annual Input-Output Model 1999 | |||
Table II-5 shows how the products of the textile and apparel industries are
used by many other U.S. industries. Shown in the left column are the industry
segments that make the most use of textile and apparel products. Each segment
shown spends more than $250 million annually on textile and apparel products.
Clearly, the heaviest users of textile and apparel products are the textile
and apparel industries themselves. Excluding these sectors, the top five industry
segments that are heavy users of textile and apparel products are motor vehicles,
furniture and fixtures, rubber and miscellaneous plastics, health services,
and new construction.
To understand how the table data functions, consider the motor vehicle segment. This industry segment is one of the heaviest users of textile and apparel products, as it spends $8.3 billion on these products. This amount is further broken down by category: the motor vehicle segment uses $143 million from the “broad and narrow fabrics, yarn and thread mills” sector; $1.43 billion from the “miscellaneous textile goods and floor coverings” sector; $7 million from the apparel sector; $6.76 billion from the “miscellaneous fabricated textile products” sector; and $3 million from the “footwear, leather, and leather product” sector.
Table II-5. Industry Segments Using Textile and Apparel Products (1999)
|
||||||
| Main Industry Segments Using Textile and Apparel Products | Sectors of the Textile and Apparel Industries Supplying to the Main Industry Segments | Total Supplied by the Textile and Apparel Sectors | ||||
|---|---|---|---|---|---|---|
| Broad and narrow fabrics, yarn/thread mills | Miscellaneous textile goods and floor coverings | Apparel | Miscellaneous fabricated textile products | Footwear, leather, and leather products | ||
| Apparel | 14,204 | 43 | 11,550 | 2,515 | 374 | 28,685 |
| Various fabricated textile products | 6,797 | 1,720 | 667 | 335 | 518 | 10,037 |
| Broad and narrow fabrics, yarn, and thread mills | 9,745 | 76 | 38 | 0 | 0 | 9,859 |
| Motor vehicles (cars and trucks) | 143 | 1,432 | 7 | 6,761 | 3 | 8,345 |
| Furniture/fixtures | 2,541 | 1,939 | 4 | 24 | 54 | 4,562 |
| Miscellaneous textile goods and floor coverings | 3,584 | 653 | 0 | 2 | 0 | 4,240 |
| Rubber, various plastics products | 1,317 | 1,692 | 12 | 5 | 0 | 3,026 |
| Footwear, leather, leather products | 260 | 172 | 5 | 0 | 2,218 | 2,655 |
| Health services | 40 | 58 | 791 | 1,058 | 30 | 1,978 |
| New construction | 0 | 1,363 | 0 | 503 | 0 | 1,866 |
| Personal and repair services (non auto) | 160 | 41 | 460 | 371 | 261 | 1,294 |
| Scientific and control instruments | 388 | 764 | 26 | 1 | 0 | 1,179 |
| Other ag. products | 490 | 278 | 0 | 389 | 0 | 1,156 |
| Paper and allied products, except containers | 139 | 871 | 7 | 3 | 0 | 1,019 |
| Wholesale trade | 179 | 69 | 357 | 310 | 9 | 923 |
| Maintenance and repair construction | 0 | 542 | 0 | 286 | 0 | 827 |
| Miscellaneous manufacturing | 466 | 22 | 234 | 24 | 48 | 793 |
| Hotels and lodging | 8 | 16 | 68 | 691 | 4 | 786 |
| Retail trade | 66 | 50 | 47 | 49 | 257 | 469 |
| Amusements | 120 | 14 | 148 | 62 | 99 | 442 |
| Educational, social services, member-ship organizations | 104 | 9 | 68 | 96 | 113 | 391 |
| Other transportation equipment | 0 | 91 | 0 | 269 | 0 | 360 |
| Aircraft and parts | 127 | 16 | 8 | 177 | 1 | 329 |
| Automotive repair and services | 59 | 73 | 193 | 2 | 327 | |
| Federal Gov. enterprises | 13 | 1 | 2 | 230 | 66 | 312 |
| Eating and drinking places | 0 | 38 | 8 | 250 | 2 | 297 |
| General industrial machinery and equipment | 0 | 262 | 1 | 0 | 0 | 263 |
| Livestock and livestock products | 0 | 195 | 0 | 0 | 57 | 252 |
| Source: U.S. Department of Commerce, Bureau of Economic Analysis, Annual Input-Output Model 1999 | ||||||
The textile and apparel industries contribute to other critical industrial sectors that support the U.S. infrastructure. The list of critical industries below is taken from the 2001 Department of Commerce report, “The Effect of Imports of Iron Ore and Semi-Finished Steel on the National Security.” Table II-6 shows the contribution of the textile and apparel industries to the critical sectors listed. The sectors that are most dependent on textile and apparel products are motor vehicles, rubber products, and health services.
Table II-6. Use of Textile and Apparel Products by Critical Infrastructure
Industries
|
||
| Sectors Using Textile/Apparel Products | Use of Textile and Apparel Products ($ Millions) |
Percent of Total |
|---|---|---|
| Motor vehicles (passenger cars and trucks) | 8,345 | 9.4% |
| Rubber and miscellaneous plastics products | 3,026 | 3.4% |
| Health services | 1,978 | 2.2% |
| New construction | 1,866 | 2.1% |
| Maintenance and repair construction | 827 | 0.9% |
| Other transportation equipment | 360 | 0.4% |
| Aircraft and parts | 329 | 0.4% |
| Water transportation | 188 | 0.2% |
| Finance | 168 | 0.2% |
| Communications, except radio and TV | 161 | 0.2% |
| Pipelines, freight forwarders, and related services | 92 | 0.1% |
| Truck/bus bodies, trailers, and motor vehicles parts | 92 | 0.1% |
| Insurance | 40 | 0.0% |
| Motor freight transportation and warehousing | 39 | 0.0% |
| Ordnance and accessories | 36 | 0.0% |
| Railroads and related services, passenger ground transportation | 30 | 0.0% |
| Air transportation | 20 | 0.0% |
| Engines and turbines | 10 | 0.0% |
| Computer and data processing services | 8 | 0.0% |
| Electric services (utilities) | 4 | 0.0% |
| Crude petroleum and natural gas | 2 | 0.0% |
| Petroleum refining and related products | 1 | 0.0% |
| Gas production and distribution (utilities) | 1 | 0.0% |
| Audio, video, and communication equipment | 1 | 0.0% |
| Water and sanitary services | 0 | 0.0% |
| Radio and TV broadcasting | 0 | 0.0% |
| Metal containers | 0 | 0.0% |
| Computer and office equipment | 0 | 0.0% |
| Subtotal – Critical Infrastructure Industries | 17,622 | 19.8% |
| Total - All Industries | 89,060 | 100.0% |
| Source: BIS Analysis of U.S. Department of Commerce, Bureau of Economic Analysis Annual Input-Output Use Table for 1999 | ||
Another measure of the contribution of the textile and apparel industries to the economy is the employment levels. Figure II-2 shows employment by North American Industry Classification System (NAICS) code for textile mills (NAICS 313), textile product mills (NAICS 314), and apparel manufacturing (NAICS 315). Employment in apparel manufacturing declined by 61.5 percent between 1990 and 2002, from 929,100 workers to 357,600. Textile mills saw employment drop by 40.4 percent between 1990 and 2002 from 491,800 to 293,200. Employment in textile product mills (NAICS 314) declined by only 6.3 percent since 1990, from 209,300 to 196,200.
Figure II-2. U.S. Employment by NAICS Classification
(Thousands)
Source: U.S. Department of Labor, Bureau of Labor Statistics
Textile and apparel employment is concentrated in only a few states. According to 2001 Bureau of Labor Statistics (NAICS data), 49.3 percent of all textile employment is located in three states, and 46.8 percent of all apparel employment is located in three states, with North Carolina in the top three on both industry lists. The top ten states in each industry represent 77.8 percent of textile employment and 76.6 percent of apparel employment.
In the U.S. textile- and apparel-related industries, women dominate the workforce, accounting for nearly 68 percent of textile, apparel, and furnishings machine operators and more than 77 percent of textile sewing machine operators in 2002. Workers of Hispanic origin also represent a strong presence in these industries, accounting for almost 35 percent of textile, apparel, and furnishings machine operators and more than 42 percent of textile sewing machine operators in 2002.
The textile and apparel industries also contribute to the economy in terms of ancillary benefits to other industries derived from R&D spending on the development of new textile and apparel products and manufacturing processes. Textile- and apparel-related research is being carried out in several fields including information technology, biotechnology, nanotechnology, manufacturing technology, and sustainable alternatives to petrochemical-based raw materials.
Textile- and apparel-related R&D seeks to introduce new products or to increase productivity. For instance, in the case of information technology, the industry is exploring the development of “smart garments” featuring electrical circuits and sensors, which can be used for added-value fashion and advanced medical diagnostics. Similarly, nanotechnology is now being used to combine the properties of natural fibers with those of synthetics.
While it is difficult to quantify the benefits to other industries from textile- and apparel-related R&D efforts, it is possible to gauge the amount spent on such research and development from responses to the BIS survey. The data in Table II-7 indicate that the industries have put a substantial, albeit declining, amount of spending into R&D, from $442.8 million in 1999 to $336.3 million in 2003, for a total of $1.9 billion over the 1999-2003 period.
Table II-7. Textile and Apparel-Related R&D Spending, 1999-2003 ($ Thousands) |
||||||
| 1999 | 2000 | 2001 | 2002 | 2003 | Total | |
|---|---|---|---|---|---|---|
| Total Spending | 442,804.7 | 397,780.3 | 385,772.4 | 371,607.4 | 336,265.7 | 1,934,230.5 |
| Government Grants | N/A | N/A | N/A | N/A | N/A | 12,944.5 |
| Cooperative R&D | N/A | N/A | N/A | N/A | N/A | 23,171.9 |
| Source: U.S. DOC/BIS Industry Survey Data | ||||||
In addition, survey data indicate that supplementing the industries’ investment were government (federal/state/local) R&D grants totaling $12.9 million between 1999 and 2003. These grants were used for computer systems development, electronic textiles, and competitive enhancement initiatives.
Firms also provided information about R&D activities such as product development/process refinement or improvement conducted in cooperation with other businesses, government, or universities. For 1999-2003, firms invested more than $23 million in such efforts. The projects included product development, fabric shrinkage control, dyeing, improved thermal and wicking characteristics, and stain resistance.