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Textile Industry Returns to South, Reflects Broader Comeback for U.S. Manufacturing

October 10, 2013

During most of the 20th century the textile industry was an economic pillar of the American South. During the 1990s the forces of globalization caused most of the industry to move overseas. Economic experts predicted that the textile industry would never return to U.S. soil. Recently, towns like like Gastonia, NC, and Gaffney, SC, have seen shuttered mills reopened for business as advanced manufacturing technologies have supported the growth of an emerging advanced textiles sector. Economic development organizations in the Carolinas are focusing on investment in the growth of a new Advanced Textiles value chain that uses automated technologies to produce synthetic fibers, industrial filters, military equipment, and clothing. But there are lingering concerns over workforce development and the effects of automation on job creation.

In a recent New York Times article, the return of the textile industry to the American South is attributed to a boost in U.S. competitiveness. Businesses interviewed for the story note that transportation costs are a fraction of what they are overseas, turnaround time is quicker, and labor costs are much lower not from a leveling of global labor costs, but because of the productivity gains from investment in automated, advanced manufacturing technologies. American textile factories have adopted automation and are employing far fewer workers.

According to the New York Times, U.S. textile exports have jumped up 37 percent in the past three years, up to $22.7 billion in 2012. However, the jump in exports has not had the same boost for employment figures. As an example, the Parkdale Mill in Gaffney, SC, which is the largest buyer of raw cotton in the United States, employs 140 workers and produces around 2.5 million pounds of yarn every week. To achieve that same production level in 1980 the factory would have required 2,000 workers.

The manufacturing comeback in the U.S. can have a tremendous impact on the apparel industry. According to figures from the International Trade Administration, in 1991, 56 percent of all the clothing bought in the United States was produced domestically. By 2012 that number had dropped to 2.5 percent. During that same time, the textile industry in the U.S. lost 1.2 million jobs (76 percent) while the U.S. manufacturing sector lost 5.8 million jobs (32 percent).

The collapse of the Southern textile industry was intensified by a series of events during the late 20th and early 21st century that radically altered the competitiveness of the American apparel industry. The adoption of NAFTA eliminated tariffs on the importation of Mexican-made apparel. The Asian financial crisis of the late 90s shredded overseas labor costs. And in 2001, China joined the WTO and offered U.S. textile manufacturers strong incentives to move production abroad. But while Southern mills might have closed, eliminating jobs for hundreds of thousands of workers, the company headquarters remained.

In 2012, the M.I.T. Forum for Supply Chain Innovation conducted a joint survey of their membership and found that one-third of American companies with manufacturing overseas were considering moving some production back home. Another 15 percent of respondents said they had already decided to move back. Respondents cited the advantages of sourcing manufacturing operations in the United States. The return of textile manufacturing, along with other opportunities to increase manufacturing, has led the Southern Governors' Association to endorse calls for a regional manufacturing strategy. Last month they released Advanced Manufacturing In the American South: An Economic Analysis Supporting Regional Development.

Economic development agencies in affected regions of the Southern U.S. have taken note and are working with local companies to re-shore jobs. The Upstate SC Alliance is working to bring manufacturing jobs back to upland South Carolina, and is focusing on providing training opportunities for local residents that will teach them the high-tech skills needed to work in the advanced textiles industry that is driving the reopening of Southern mills.

While the return of textile manufacturing is good news for U.S. exports, there are already concerns among Southern business leaders and policymakers that the regional labor force is not prepared to fill the new manufacturing jobs. In September, the Southern Growth Policies Board released Re-Imagining Workforce Development, which calls for stronger workforce training programs, new models of service delivery, and deeper public-private partnerships.