Yarn and fiber prices were already rising by value before the outbreak (the average of the A-index in December 2021 was up 65% compared to February 2020, and the average of the Cotlook Yarn Index was up 45% over the same period).
Statistically, the strongest correlation between fiber prices and apparel import costs is around 9 months.This suggests that the surge in cotton prices that began in late September should continue to drive up import costs over the next five to six months.Higher procurement costs could eventually push retail prices above pre-pandemic levels.
Overall consumer spending was basically flat mom (+0.03%) in November.Overall spending rose 7.4% compared to the same period last year.Apparel spending fell MoM in November (-2.6%).This was the first month-on-month decline in three months (-2.7% in July, 1.6% month-on-month average in August-October).
Apparel spending rose 18% year-on-year in November.Relative to the same month in 2019 (pre-COVID), apparel spending was up 22.9%.The long-term average annual growth rate for apparel spending (2003 to 2019) is 2.2 percent, according to Cotton, so the recent increase in apparel spending is anomalous.
Consumer prices and import data (CPI) for apparel increased in November (latest data).Retail prices rose 1.5% month-on-month.Compared to the same period last year, prices rose 5%.Despite monthly increases in 7 of the past 8 months, average retail prices remain below pre-pandemic levels (-1.7% in November 2021 vs. February 2020, seasonally adjusted).
Post time: May-18-2022
