Textiles competes

You have to look no further than North Carolina to see the impact of international competition on an industry. Our state was once the world’s center of textile and apparel production, and now much of that production has gone to foreign countries. But a rebound may be taking place. N.C. State University economist Mike Walden explains.

“I think most people, especially here in North Carolina, know this story — that we had a very large and vibrant textile industry for decades. The last three decades it’s slowly withered away, primarily because those companies found they could manufacture those textile products cheaper in foreign countries, particularly using lower-cost foreign labor. But the good news … is some of those cost differentials have narrowed.

“For example, it used to be that the difference between foreign labor and US labor was about 25 percent. Because the U.S. labor was about 25 percent higher in the textile industry than in foreign countries. That gap has gotten smaller. We are now only about 10 to 15 percent more expensive. So that is good.

“Number two: Transportation costs have gone up obviously with fuel prices. So that is going to work against the foreign producers who are making those textiles products in their country and then shipping them to the U.S. So again, that is a good factor for U.S. producers.

“And then lastly there have been some labor disruptions and increases in foreign wages in foreign countries that have interrupted supplies and actually caused some buyers of textile products in the U.S. to look to U.S. providers.

“So this does not mean the textile industry is going to come back to the U.S. en masse, but it does mean that the bleeding may stop and we actually may get some of that industry back.”

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