China remains promo’s primary sourcing destination. Of suppliers who import product, 88% did so from China in 2022. (The next closest country is Vietnam at 21%.) Still, SOI research also shows that more than half of all suppliers have explored new countries from which to source in the last 12 months due to trade uncertainty with China.
With sourcing diversification a defined trend in recent years, the numbers show those efforts are continuing. And while other Asian nations are generally the most popular China-alternative promo manufacturing spots, there have been growing efforts among certain firms, particularly apparel suppliers, to situate some production closer to the U.S. and Canada – a phenomenon called nearshoring.
“The trend of nearshoring will accelerate,” predicts Jose Gomez, president/CEO of Top 40 supplier Edwards Garment (asi/51752). “It will do so because it lowers risk and gets supply closer to an increasingly hard to predict demand. It will also accelerate thanks to infrastructure investments, particularly in the production of yarn and fabric, that are key in sustaining growth.”
Hover over the bar charts to see more detailed State of the Industry statistics.
The percentage of total global manufacturing output accounted for by China.
WHERE SUPPLIERS IMPORT PRODUCTS FROM
PRIORITY SHIFT
Getting out of China became less urgent in 2022, with suppliers who “Strongly Agree” dropping while overall numbers remained steady. The reason? With the country loosening its pandemic restrictions and shipping costs dropping, the need to move sourcing away from China became less pressing, even as the desire to diversify remains.
“In the last 12 months I have actively explored new countries for sourcing of products due to uncertainty about the trade situation with China”.
12% of distributors sell to clients outside of the U.S. and Canada. These companies report that those international sales make up 13% of their total sales.
of suppliers (55%) don’t sell internationally.
“China will remain the dominant source of product for many years to come due to the massive infrastructure it has. This has been built over the last 50 years.”Trevor Gnesin, Logomark
(asi/67866)
Demand for USA-Made Products Retreats
While interest has waned since 2020, there remains a defined market for domestic goods.
Interest in Made-in-the-USA promo products spiked during the earlier days of the COVID-19 era, but has since waned.
The heightened interest was, in significant part, a result of global supply chain upheaval that made importing more difficult, leading to gaps in stateside supplier inventory of items manufactured overseas.
Amid the shortages of internationally produced stock, Made-in-the-USA options became more sought-after by distributors and their end-clients.
Still, as the COVID-age supply chain crisis retreated and industry inventories right-sized, desire for Made-in-the-USA has settled down.
“Distributors and end-customers are price conscious,” says Pierre Montaubin, chief product and sustainability officer at Top 40 supplier Koozie Group (asi/40480). “Made-in-the-USA production remains limited and sometimes cost-prohibitive, which may make those items less attractive now that the pandemic is no longer top of mind.”
“MY CLIENTS ASKED FOR MORE MADE-IN-THE-USA PRODUCTS IN 2022”
(Percent agree)
“Since product is flowing better again from overseas, I would say that demand for Made-in-the-USA is back to where it was pre-COVID,” adds Rich Carollo, president of Lion Circle (asi/67620), a supplier that manufactures product domestically in Chicago.
Indeed, Made-in-the-USA interest hasn’t disappeared. Certain types of buyers often seek domestically made items, including unions, military outfits, government agencies, political campaigns, nonprofits that support the armed forces, and some manufacturers. Of course, the end-client scope isn’t limited to such buyers, and there are advantages to U.S.-made that keep the category relevant.
“Our made or assembled in the USA products – including writing instruments, calendars and Sticky Note adhesive note pads and scratch pads – continue to be strong performers and domestic production allows us to offer quick turnaround times, even on large orders,” Montaubin says.
Nonetheless, a sustained industry-wide surge in demand for Made-in-the-USA across a broad spectrum of promo product categories doesn’t appear likely.
“It’s rare that a customer asks to have products sourced from a U.S. manufacturer,” says Joseph Sommer, president of Whitestone Branding (asi/359741). However, Sommer adds, buyers are increasingly “requesting products that are sourced ethically and sustainably, not caring where they come from, but that whoever’s producing the items is doing so with care and consideration for the environment and the labor force.”