talk

Over the past few years the cost of clothing has not increased at the rate of inflation, but it looks like the tide is finally turning. From the credit crunch here at home and in the West, the rising costs of raw materials, surging oil prices with no cap in sight and the soaring price of food; the clothing industry is collapsing. So what does the price of oil have to do with my designer jeans?

Well, most synthetic fibers used in clothing are made of, you guessed it, oil. Soaring oil prices are making it difficult for manufacturers to operate their factories and cover the costs of shipping to foreign markets. The wages paid to factory workers are also increasing at a steady rate, especially in developing countries like China and India.

Food shortages are being reported all over the world as increased amounts of rice are being used to create ethanol for fuel. Subsequently, food prices have shot have shot up in response to shortages and a surge in crop prices. Fertilizer costs are also soaring, adding to the costs of raw materials used in the production of clothing. The credit crunch at home and in the West is only adding to the squeeze as low-margin clothing manufacturers are finding it harder and harder to turn a profit.

Consumers should get ready for clothing prices to follow suit as importers are faced with greater overhead costs. They will either have to raise prices for the clothes they make or go under - which in turn will reduce the supply. For consumers in Europe and the U.S. the outcome is crystal clear; prepare to pay more for clothes in years to come. I can kiss my discretionary purchases good-bye.