2022 Apparel Manufacturing Outlook – 3 minute read
Does September feel like the beginning of a new year for you?
For our team, Fall has a fresh start feeling. It’s not our year-end but the success and challenges of Q1-Q3 are in full view. For many procurement professionals, September is a time to look at what’s working well and what’s not. As you focus on 2022 demand planning, below are three insights (we think) will impact your apparel manufacturing decisions.
1. Consumer demand will stay positive (so should you).
The United States GDP is back to where it was at the end of 2019. The fastest recovery ever recorded. And Q3 GDP growth in Canada is expected to be extremely strong.
Did you miss this good news?
The media are like ambulance chasers…what bleeds, leads. Don’t let alarmist stories muddle the big picture. The United States GDP has more than fully recovered.
- Q2 output is .8% higher than before COVID
- Gov’t income supports and stimulus spending are boosting employment, salaries and wages
- Overall household debt as a % of income is down from pre-COVID rates + personal savings are up
Despite the contagious Delta variant, the North American economy will continue to rally. Don’t let the negativity in the news taint your demand forecast and outlook for 2022.
2. Temporary factors are driving up prices (it’s not the 1980s).
Freight experts and economists are telling us today’s crazy container costs and supply shortages = increased prices is temporary. We shouldn’t compare steep price increases to the inflationary 1980s. Consumers flush with more disposable income are demanding more goods and factories can’t keep up. The Delta variant is hitting Southeast Asia hard, further snarling supply chains and material shortages globally.
The good news is that sales in 2021 are up for many brands (albeit your profits might not be). We expect supply chains and margins to improve as we move into Q2 2022. As a landed-duty paid apparel manufacturer, JJM’s quotes include all duties, freight, admin and broker fees. Given the volatile shipping costs over the past year and a half, this model has helped our clients protect their often slim margins.
3. Plan. Plan. Plan (or don’t get product).
If you take one thing away from this article, it’s this… IF you don’t plan ahead, you won’t get product. Global supply chain problems delaying inventory deliveries will continue to be the #1 apparel manufacturing concern in 2022. Plan Ahead. We are recommending a lead time of 8 months from tech spec submission (under normal times a minimum lead time of 6 months is sufficient). Our main message is this… Plan. Plan. Plan. Make sure you have inventory to take advantage of increasing consumer demand in 2022.
A reckoning is coming. We’re hearing from many brands frustrated with their suppliers’ ongoing issues. September is a good time to evaluate partnerships and manufacturing options. JJM has a proven end-to-end manufacturing process and long term relationships that can strengthen your supply chain. Contact us for a complimentary consultation. We’d love to learn about your business and tell you more about ours.