As American countries head towards recession, many will begin to question exactly how the garment industry is affected by global trade in near future. The US has recently found itself approaching what some economics fear could be the next recession and its impact on many industries negatively in terms of profit and human capital. Among the industries that would hit by the recession in the US. Garment industries as they outsource manufacturing and as well as import raw material and other products from foreign countries. America continues to head towards recession; many will begin question exactly how the garment industry is affected by the global trade in coming years.

The world economy is going through a chapter of turbulence as a result of the financial turmoil. The garment industry worldwide has to once again embrace uncertainties, striving to survive a period of slow or even negative growth. The current market is tough for many in the garment-manufacturing sector. A number of factory owners have expressed concerns over a significant drop in orders as their customer cut back on investments, yet some industry players, due to their special business nature, were more confident to ride out the storm and gain progress amid the difficult times.

So far so good

With financial turmoil affecting the business of Garment manufacturers and traders, a less optimistic mood was felt among both importers and exporters at the same time recent apparel show in Asia, including the ITMA Asia + CITME 2008, Intertexture Shanghai Apparel Fabric, and Cinte Tec textile China in Shanghai. At the latest apparel show in Hong Kong, the Inters off Asia Essential-Autumn 2008 held in October, visitors showed concerns over the adversely affected global apparel traffic. US-based importers, including chain stores, slashed import of garments from Asia since October 2008, although some of this was discernible even before the global financial crisis blew up.

Bernd Muller, project manager (Brand apparel fabric and fashion) he said we are presently not feeling the pressure very much, but we may get to feel it in the future. If the crisis continues to persist; than the problem will be of a long-term nature.

On the supply side, there has been an over-capacity in the world for years. Small Asian countries lacking dominant industries other than the apparel manufacturing might find it hard to bargain in the international supply chain. With the abundant global supply, they (Asian textile and apparel manufacturers) may be squeezed in the next 12-18 months Mr. Huang told ATA journal in October 2008. Market segment such as general sportswear, outer wear and outdoor sportswear have paid extreme attention to the latest development and also getting more acceptance in more developed countries. In this increasingly globalize world, Asian suppliers found they were affected by the US financial crisis.

Some Chinese's textile experts, who predicted that the industry was in deep fear in view of rising costs and weakening global demand, depicted a gloomy picture. Some even said the industry could face a large quantity of bankruptcy, especially among export- oriented enterprises by the end of 2008 or nearly 2009. Further efforts to rationalize the international supply chain may be done by banks, which is no longer finance companies easily. Suppliers operate on a high level of financial leverage (i.e. heavy loans) rather than trying to earn through their own manufacturing activities might suffer severely.

The latest data released by the Apparel Export Promotion Council (AEPC) of India (in November 2008) showed that India is exports of readymade garments plunged 6.59% in September 2008 over the same month in the previous year as a consequence of global economic slowdown. The market sentiment is very week said AEPC Secretary General. Vimal Kirti Singh he explained that there was a drop of 20%-25% in the business of winter apparels from India. Orders were deferred or cancelled as stores faced weak sales in the US. There is a gradual deterioration in the growth of readymade garments sector said Mr. Singh in a letter to Joint Secretary at the Ministry of Commerce P.K. Dash in response to queries on the impact of global recession on Indian exports.