U.S. Textile Industry Proves More Competitive as Georgia, North Carolina Lead with $999 Million in Capital Spending

Researched by Industrial Info Resources (Sugar Land, Texas)--Many U.S.-based textile companies have returned home after years of pursuing cheap overseas labor. According to the National Council of Textile Organizations (NCTO), about 650 textile plants closed in the U.S. between 1997 and 2009, costing hundreds of thousands of American jobs. But several trends are bringing back capital spending. Industrial Info is tracking 65 textile-related projects in the U.S. with a total investment value (TIV) of more than $1.39 billion, including 32 projects worth $999 million in Georgia and North Carolina alone.

Click on the image at right for a graph detailing the top five U.S. states for textile spending.

Among the reasons cited by the NCTO and other industry watchers for the return of textile labor are lower transportation costs in the U.S.; steep tariffs in other countries; favorable tax rates in the Southeast and Mid-Atlantic regions; and safety concerns--China, India and Bangladesh have become notorious for lax regulatory oversight that has led to numerous garment factory accidents. The worst was Bangladesh's Savar building collapse in April 2013, which claimed more than 1,100 lives.

But despite these gains in spending, the U.S. textile and apparel industries have seen year-over-year declines in average annual employment since 2000, according the U.S. Census Bureau. (The numbers have steadied a bit since the overall U.S. Industrial Manufacturing Industry started to see improvement after 2010.) Machines have replaced human hands for much of the grunt work, and employers are more often in need of workers with technology-related experience to run the computers.

Gulf Coast Spinning Company LLC, a venture recently undertaken by Zagis USA LLC (Lacassine, Louisiana), is building one of the two largest U.S. textile projects tracked by Industrial Info: a $130 million cotton spinning plant in Bunkie, Louisiana. The project involves building a 500,000-square-foot facility to produce 2.5 million pounds of spun yarn per year. Alfred Palma LLC (Lake Charles, Louisiana) is serving as general contractor. Construction is expected to be completed by the end of the year.

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U.S. textile exports have improved along with the return of capital spending. According to the U.S. International Trade Administration's Office of Textiles and Apparel, the value U.S. exports have risen from $16.59 billion in 2009 to $23.67 billion in 2013. (In the eight years leading up to the 2008 financial crisis, exports averaged a little more than $19 billion.) Countries that have provided consistent year-over-year gains in value include Canada, Mexico, the Association of Southeast Asian Nations (10 countries), and much of South America and Sub-Saharan Africa.

According to the NCTO, foreign manufacturers also are boosting the pace of U.S. investment. Foreign-based companies that have established a foothold in the Southeast region include Gildan Activewear Incorporated (Montreal, Quebec), ShriVallabh Pittie Group (Mumbai, India), Keer Group Incorporated (Hangzhou, China) and Mattex Group (Dubai, United Arab Emirates).

Gildan Activewear is planning the other of the two largest U.S. textile projects: the $130 million construction of a yarn-spinning plant in Salisbury, North Carolina. The company plans to build a 500,000-square-foot facility to expand existing operations. G.L. Wilson Incorporated (Statesville, North Carolina) is serving as general contractor. The project, which kicked off earlier this year, is expected to be completed in December 2015.

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The largest textile project in Georgia is being planned by ShriVallabh Pittie: the $70 million construction of a carded cotton yarn manufacturing plant in Sylvania. The proposed 250,000-square-foot building is designed to manufacture yarn that will be used in cloth for T-shirts, socks, bed sheets and other items. New South Construction (Atlanta, Georgia) is serving as general contractor. The project is expected to kick off in mid-2015.

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More than half of the U.S. textile projects tracked by Industrial Info already are under construction: 45 projects with a TIV of $792 million. Eleven projects with a TIV of 253 million are in the planning stages, while nine projects worth $346 million are in the engineering phases.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.