The 10 clothing supplier countries to watch out for in 2022 (2023)

There is a real mix of likely and unlikely suspects injust stylelist of the top ten apparel supplying countries to watch in 2022, including two intercontinental countries and two based in Central America.

It's also worth noting that several major garment-supplying countries didn't make the top ten list for 2022. Sri Lanka, for example, trails off at number 11, Bangladesh is number 12, and India is further behind. down the list, in the sixteenth position. , followed by Pakistan, which occupies the eighteenth position.

Methodology

Scores for 27 of the world's top apparel supplying countries are drawn from data that can be found exclusively on GlobalData's Apparel Intelligence Center.

It is based on a maximum score of 75, with each sourcing destination receiving a score of five for the top 15 factors that would affect a supply chain executive's decision to use a country to source apparel in 2022.

Each of the 15 factors was scored between one and five, with five being excellent, and the scores were added to create a final result for each country.

The total scores for each country were then added up and ranked from highest to lowest.

Just Style focused on the ten best performing countries, as well as those with the three lowest scores out of the total 27 countries measured. However, the full list of countries with their scores can be found at the end of this resource.

The 15 factors used to calculate the apparel sourcing results are:

• Ability to deliver Free/Freight on Board (FOB): the most widely used shipping contract in garment exports.
• Precio
• tariff advantage
• Compliance/Sustainability
• production quality
• Efficiency
• Wait time
• reliability
• Ability to create basic products.
• Financial stability
• Vertical integration/ability to acquire new materials
• Political stability
• Order Quantity Flexibility
• Innovation and ability to develop products with buyers.
• Ability to create value-added products.

top ten

10.Thailand

Score: 49.5/75

Thailand, from Southeast Asia, ranks tenth on the list with a score of 49.5 out of 75. The country scored highly on seven out of 15 factors within the scorecard data. Its highest scores were for innovation and ability to develop products with buyers (4.5/5), ability to supply FOB (4/5), production quality (4/5), delivery time (4/5), reliability ( 4/5). ), ability to create basic products (4/5) and vertical integration/ability to source new materials.

According to GlobalData, apparel accounts for 30% of the country's gross domestic product (GDP) and comprises 2,500 apparel manufacturers with nearly a million workers. Thailand is committed to improving its competitive position in apparel by refining its value-added products, introducing more advanced technologies, and providing import duty and duty-free exemptions on machinery and inputs required for manufacturing. The government is also making its regulatory framework more efficient and transparent to attract investment and integrate the economy into the global marketplace, a move that will help companies participating in the Association of Southeast Asian Nations integrated textile supply chain. (ASEAN). 🇧🇷

9. Morocco

Score: 50.5/75

Africa-based Morocco ranks ninth with a score of 50.5 out of 75. It scores top marks (5/5) for its ability to create commodities as it remains a major producer of high-quality commodities. quality at a reasonable cost. The country's growth strategy includes plans to explore this niche and the country is focused on low-value-added basic production, although it has high-value-added capabilities.

Morocco achieved near maximum scores (4.5/5) for its tariff advantages, production quality and delivery time.

Textile and garment manufacturing is Morocco's largest export, with GlobalData citing 1,200 factories and 190,000 garment workers and providing a quarter (25%) of manufacturing employment. Three quarters (75%) of garment exports are formal and informal and the value by weight and volume is among the highest in the world.

Over the next few years, Morocco should benefit from the Global Textiles/Middle East and North Africa Textiles International Trade Center (GTEX/MENTATEX) training program on fast fashion, knitwear and denim.

8.Guatemala

Score: 51/75

Guatemala ranks eighth with a score of 51/75. The Central American country received the highest rating for its FOB delivery capacity (5/5), which includes cost, insurance and freight (CIF); and delivery duty paid (DDP), primarily to the US.

The country also scored 4.5/5 for its tariff advantage, delivery time and innovation and ability to develop products with buyers.

Clothing represents Guatemala's second largest export (around 20%) and the country offers many benefits for retailers and brands, from quality and efficiency to vertical integration and multiple free trade agreements.

It is certainly one of the most surprising additions to the top ten list as the country faces major problems including deteriorating social stability. In fact, more than half of its population is below the national poverty line and the country suffers constant labor conflicts. On the positive side, the country's president, who took office in January 2020, promised to continue improving the areas of health, education, security and infrastructure, although the fight against the pandemic remains a government priority.

7. Egypt

Score: 51/75

Egypt, which sits on the border between Africa and the Middle East, also scored 51/75, but ranked higher than Guatemala, earning two "excellent" ratings compared to the Central American country.

Egypt received an excellent award (5/5) for its delivery time and ability to supply FOB for apparel, from formal wear and denim to basic cotton garments.

A big advantage of using Egypt as a garment sourcing destination is that their average delivery times range from 30 to 75 days. In fact, some products can be ready to ship in as little as 12 days and samples can be ready in as little as a week. Shipping to countries in the Egypt region takes 2-18 days, Europe 6-12 days, and the US 12-30 days. Egypt has also improved its port processing speed, although labor unrest could lengthen loading and waiting times.

Egypt has a moderately sized garment industry with the EU and the US as its main export markets. Textiles and clothing represent around 8% of exports, 27% of industrial production and 10% of the country's active population. The garment sector employs around 1.5 million workers in 2,500 factories. However, outside of Egypt's qualified industrial zone, the industry is dominated by small and medium-sized enterprises, which are often not modernized or integrated into garment production.

In recent years, it has become easier to do business within the country and interest rates have come down. Egypt has worked hard to increase sustainability, but workers' rights remain among the poorest, according to the annual report of the International Trade Union Confederation.

6. Mexico

Score: 52/75

Sixth place is occupied by Mexico with excellent scores (5/5) both for its FOB supply capacity and for its tariff advantage. Mexico has a long history of FOB supply, which is widely available, although FOB product prices have increased relative to its Asian competitors.

The country scored high on its tariff advantage as it applies strict rules of origin that restrict the use of inputs that do not belong to the United States-Mexico-Canada Agreement (USMCA). The agreement promotes US investment in Mexico's apparel industry, which enjoys duty-free exports to the US, representing 85% of its market. It has a large number of free trade agreements (12 with 46 countries), which makes the Mexican market one of the most open and competitive in the world. While the US is the largest import partner for textiles and apparel, China, India, Bangladesh, and Vietnam are growing as important trading partners.

Clothing is a major contributor to the Mexican economy, employing around 400,000 workers in 22,000 factories. Apparel exports, depressed by the pandemic, are expected to grow 8% through 2022. Mexico's position as a manufacturer for export needs to be strengthened with its continued fiscal and financial reforms, as well as attention to energy, violence, corruption and infrastructure.

5. El Salvador

Score: 53.5/75

Fifth place is occupied by El Salvador in Central America with a score of 53.5 and 5/5 for its FOB supply capacity with the change of the country from pure Cut, Sew, Cut (CMT) to the complete package.

The country also scores near perfect (4.75/5) for its vertical integration/ability to procure new materials. It continues to integrate its well-established textile production with its tailoring production, and full integration is in its garment production groups. Although the country relies heavily on imported materials for its cotton products, it produces synthetic fibers and fabrics and has increased its focus on products that use these materials, such as the growing sports market. It is also importing high-tech equipment for the production of both fabricks and cut and sewn.

El Salvador trades under the Dominican Republic-Central America Free Trade Agreement (DR-CAFTA). It is one of the top ten suppliers of textiles and apparel to the US, where more than 70% of the industry's exports find their market. Clothing is one of the country's strongest export sectors, accounting for around 30% of exports and employing 60,000 workers in 800 factories.

On the negative side, El Salvador has one of the slowest growing economies in Central America and faces serious challenges to economic growth due to the pandemic. To help its struggling economy, the government has introduced regulatory reforms.

4 China

Score: 54/75

China ranks fourth with a score of 54 and scores excellent for its ability to supply FOB, which it can do at low cost due to its high level of integration. China offers many other international trade terms, including Duty Paid (DDP), but FOB is considered the best option.

The global powerhouse also scored 5/5 for its vertical integration/ability to create new materials, as it has a well-established vertically integrated garment production system known for its speed, efficiency and reliability. China has internal, material, infrastructural, technological and human resources that allow it to control supply, production and value chains. As labor costs rose, China moved vertically integrated production to nearby supplier/trade partner countries, using their supply chain resources and expertise. It also improved integration with automation. The robustness of the system was demonstrated by the rapid recovery of its manufacturing after the peak of the pandemic.

China is the world's second largest economy and the largest exporter of clothing. Its leadership position has been weakening, but no other country can match its supply base, range of skills, quality levels, product variety, integrity of its supply chain, or ability to absorb its business. Despite pandemic-related disruption to supply chains and trade tensions with the US, the country continues to attract apparel buyers as rising wages are offset by efficiency gains and productivity through advanced manufacturing technologies.

In fact, China was still the largest supplier of apparel to the US market as of October 2021, according to data released by the US Department of Commerce's Office of Textiles and Apparel (OTEXA).

China's emergence as one of the world's largest consumer markets may see many of its export factories switch to producing for the domestic market, but its role as a dominant player in global apparel supply is expected to continue. in the next years. The government has adopted economic policies to try to mitigate risks to the garment industry, including strengthening relations with neighboring Asian countries, as well as Africa and Central America.

However, it should be noted that there are reports of forced labor in China's Xinjiang region and this has led many countries, including the US, to ban imports of Xinjiang-made cotton.

3. Peru

Score: 55.5/75

Peru is the only South American country to be in the top ten with a score of 55.5. The country did not receive any "excellent" scores, but its highest overall score comes from receiving near-top scores of 4.5/5 and 4/5 for nine of the 15 factors.

The country scored 4.5/5 for its tariff advantage, production quality, delivery time, and vertical integration/ability to source new materials.

This is not surprising, as Peru is widely known for its high-quality production and delivery times that can be as long as 30 days, depending on the size and sophistication of the manufacturer.

Apparel is Peru's largest manufactured export, with the majority going to the Americas. The industry employs around 130,000 workers and attracts global brands, in part due to its rich heritage in textile craftsmanship and respect for the environment. Prior to the pandemic, the sector enjoyed three consecutive years of growth with strong expansion into the US market. Peru's manufacturing industry and commerce have been hit hard by the pandemic, and the economy has contracted sharply, despite the fact that the country entered the crisis with sound fiscal policies and strong balance sheets. However, it is expected to remain attractive to foreign investment in 2022, as its ease of doing business remains among the best in the region.

2.Turkey

Score: 58/75

Turkey, which lies between Europe and Asia, is arguably one of the most notable apparel sourcing destinations to make the top ten list.

It scores 58 points in GlobalData's Sourcing Scorecards data, which is just one point less than the top-ranked country. Additionally, it received top scores in six of 15 key factors, including:

• FOB supply capacity
• production quality
• Ability to create basic products.
• Vertical integration/ability to acquire new materials
• Innovation and ability to develop products with buyers.
• Ability to create value-added products.

FOB is widely available in Turkey and the national drive to digitize its entire supply chain makes it a resilient option for companies concerned about the effects of theomicronvariant as we move into 2022.

Turkey has a highly skilled workforce and a history of fine craftsmanship. As Turkey moved up the list of top exporters, the industry felt additional pressure on price, value added and quality.

It has a wide range of manufacturing capabilities, including staples, which remain a large part of its apparel exports. Already a supplier to many basics-focused brands, Turkey is seeing increased interest from European brands. The country has also introduced technologies that will improve its position in the low-cost market.

Clothing and textiles are considered the backbone of the Turkish industry and are one of Turkey's largest exports. To boost manufacturing and export, the government is targeting infrastructure improvements, such as adding new railways to facilitate transportation and increasing the number of logistics centers. These improvements should further reduce the already rapid delivery to Europe in 2022, partly mitigating the country's rising input and labor costs.

1.Vietnam

Score: 59/75

The first place and top apparel destination to watch in 2022 is Vietnam in Southeast Asia. He scored 59 and achieved 3/5 or better on all 15 factors with an excellent score for his political stability.

The country is the most consistently stable country in Southeast Asia, and it is this track record of stability that puts it at the top of most global charts. It honors its various international agreements, such as the EU-Vietnam free trade agreement, which requires compliance with issues such as intellectual property and human rights. Vietnam's willingness to cooperate under the terms of these agreements limits the threat of destabilizing international pressures. Vietnam's stability and independence have allowed it to establish various economic, political and military ties with regional powers such as Japan and India, as well as with the United States.

Since its transition to a market economy in 1986, Vietnam has developed one of the most vibrant economies in the region, emerging as a global powerhouse in its manufacturing and exports, with clothing playing an important role in the country's growth. Clothing, Vietnam's second largest export (19%) after electrical equipment, reached the $60 billion mark in 2019. The industry employs around 2.5 million workers in 6,000 factories.

The labor market has become more flexible as the country has shifted its economic focus from agriculture to manufacturing. Vietnam has begun reforming state-owned companies through greater transparency and blended partnerships with foreign investors. Foreign direct investment helped improve infrastructure and supported further knowledge transfer. Exports should continue to do well, especially as the country signs more preferential trade agreements, such as the one it has with the EU, which came into force at the end of July 2020. Vietnam's agreements support a supply chain that requires external resources due to to national inputs. not accompanying the increase in production demands.

The three countries at the bottom of the list and with the greatest challenges in 2022

The bottom three sourcing destinations most likely to face real challenges in 2022 experienced political instability and uncertainty in 2021.

Here's Just Style's analysis of the three countries with the lowest scores as we head into 2022:

1. Burma -18.5/75

Myanmar, which scored the lowest of 18.5/75 and zero on six out of 15 key factors, is very likely to have another challenging year in 2022 after the February military coup.

The international reaction and investor uncertainty deeply damaged an economy that had already slowed sharply due to the pandemic. The country is likely to find itself without the support of foreign aid programs and ineligible for preferential trade agreements. Additionally, you may face embargoes on your exports and imports. In addition, it is likely that international tensions stemming from human rights violations against the Rohingya will resurface with greater force.

Myanmar has experienced continued economic growth, integration into the world economy, and foreign investment in the garment industry and other sectors.

Clothing exports, in turn, had been growing every year until 2020. To sustain growth, the government had been modernizing the financial sector and improving infrastructure and energy. To make up for lost relations with Western nations, Myanmar's relationship with China is likely to strengthen. The China-Myanmar Economic Corridor had already begun to increase Chinese trade and investment in Myanmar, although the latter's military expressed distrust of China.

Just Style reported in September, theThe Ethical Trading Initiative (ETI) was working with the Fair Wear Foundation to develop a human rights impact assessment of the evolving situation in Myanmar..

Earlier the same month, it was reported that the Global IndustriAll Union and its Myanmar affiliate, the Myanmar Industrial Workers Federation, werecalling for a boycott of products made in Myanmaras part of a broader campaign for comprehensive economic sanctions against the military junta.

2. Haiti – 25/75

Ranking the second lowest score on the scorecard data, this small Caribbean nation is considered the poorest country in the West, but it is almost entirely dependent on the garment industry.

The country scores low on almost all 15 key factors, with high scores of 3.5/5 for its tariff advantage due to trade with the US and 3/5 for its ability to manufacture basic goods.

The country, which scored zero in political stability, suffers from severe and chronic political and institutional uncertainty that, along with the pandemic, has plagued the nation for the past two years.

The country faces significant challenges to growth due to disruptive social and political unrest, corruption, and organized crime. With some of the lowest scores for infrastructure, credit and ease of doing business, the country sadly lacks the stability and resources for sustained improvement.

It also remains highly vulnerable to natural disasters, and it takes many years for the country to recover from the aftermath of severe hurricanes, which are common in the Caribbean region.

Haiti recently ramped up its clothing production and reintroduced cotton farming to reduce costs and support vertical integration. The main inputs for the Haitian garment industry are cotton fabrics, which come mainly from the Dominican Republic, and synthetic fabrics, mainly from China.

On the plus side, it was recently revealed that cCompanion bills have been introduced in the US Senate and House of Representatives to extend the HOPE (Haiti Hemisphere Opportunity Through Partnership) and HELP (Haiti Economic Improvement Program) programs. until 2025🇧🇷 These trade preference schemes aim to improve opportunities for the people of Haiti through trade preferences designed to support employment in the garment industry.5.

3. Ethiopia – 33/75

The East African nation scored the third lowest in the scorecard data, not surprising given the nation's ongoing civil war.

2022 is also likely to wreak havoc on the country's garment sector, especially as the US has taken the decision to suspend the country from the African Growth and Opportunity Act (AGOA) effective January 2022.

AGOA gives Ethiopia duty-free access to the US market and Ethiopian garment suppliers have warned that withdrawing AGOA's trade benefit will have a negative effect on the 50,000 jobs created through the scheme.

Ethiopia, the^{North Dakota}largest supplier of apparel to the US market, has been an AGOA beneficiary country since its enactment in 2001 with70% of the $750 million earned by the East African country's two dozen industrial parks since 2014, ending up in the US market under AGOA.

A clothing supplier told Just Style in an exclusive and anonymous interview that once the US cancels the benefit in January, all these workers will be in trouble again.

Meanwhile, a statement by the Ethiopian Ministry of Trade and Regional Integration (MoTRI) made in November said the move would reverse significant economic gains and unfairly impact and harm women and children.

The country remains one of the poorest in the region, despite having one of the fastest growing economies. In recent years, the government has sought to diversify its economy beyond agriculture, prioritizing the development of the export textile and clothing industry. The sector has experienced rapid growth, driven in part by foreign direct investment directed at the European market. Low government-mandated wages also helped expand the industry.

However, the challenges of the pandemic and civil strife risk making the country less attractive to apparel suppliers in 2022 and beyond.

The complete list of 2022 apparel sourcing countries based on GlobalData sourcing scorecard data (listed from highest to lowest ranked)

1. Vietnam: 59
2. Turkey: 58
3. Peru: 55.5
4. China: 54
5. El Salvador: 53.5
6. Mexico: 52
7. Egypt: 51
8. Guatemala: 51
9. Morocco: 50.5
10. Thailand: 49.5
11. Sri Lanka: 49
12. Bangladesh: 48.5
13. Indonesia: 47,5
14. Madagascar: 46,5
15. Tunisia: 46
16. India: 45,5
17. Honduras: 44
18. Pakistan: 43.5
19. Cambodia: 43
20. Dominican Republic: 41.5
21. Jordan: -40.5
22. Filipinas: 39
23. Malaysia: 38
24. Nicaragua: 37
25. Ethiopia: 33
26. Haiti: 25
27. Burma: 18.5