As fears over another U.S. economic downturn heats up, Asian exporters are bracing themselves for the worst. All eyes are on our leaders in Washington who passed a fiscal stimulus package yesterday that they hope will be the catalyst for change.

Decreasing demand from the American market has already pushed many Asian suppliers to embrace reform in a variety of ways. According to NYTimes Hong Kong bureau chief, Keith Bradsher, some are simply lengthening their worker’s holidays whereas others are taking a more proactive approach by investing in new technologies or expanding their presence in additional countries.

Such shifts in behavior have been in response to not only external shocks, but also worries over the stability of suppliers’ indigenous economies. While there are those who remain optimistic about Asia’s continued growth despite a U.S. slump, Goldman Sachs CEO, Lloyd Blankfein, is not one of them. “It’s impossible for [there] to be a complete decoupling,” he said at this year’s World Economic Forum meeting in Davos. “How can growth be maintained if the ultimate source of demand is receding?”

Yiping Huang, head of Asia-Pacific analysis at Citigroup, agrees that the global nature of today’s businesses means possible recessions in Europe and the U.S. will have ramifications well beyond the borders of those countries. Earlier this month Citigroup actually reduced their average estimate for Asian economic growth by four-tenths of a percent.

Panjiva’s independent examination of apparel export data mirrors the deceleration seen in global trade. Shipments from China to the U.S. dropped 61% from the third to fourth quarter of 2007. In comparison to the same quarters for previous years, the numbers are considerably lower: (23%) in 2006, and 1.3% in 2005. India posted a similar decrease, with the change in exports from Q3 to Q4 in 2005 and 2006 falling a modest 1.9% and 5.2% respectively, while in 2007 it slipped 29%.

Wondering if such slides were systemic, our team looked at data from Middle Eastern and African economies. Sure enough, those trends continued. In Egypt the changes from Q3 to Q4 was up 22% in 2005, down 19% and 58% in 2006 and 2007 respectively.

When taking a step back though and looking at the annual figures, things are less gloomy. China’s apparel exports, a bit sluggish during the last quarter of 2007, did rise to record levels that year, peaking just below 252,000 apparel shipments, well above the 146,000 in 2006 and 101,000 in 2005. India also demonstrated record growth, where shipments to the U.S. jumped from 18,500 in 2005 and 24,000 in 2006, to 48,000 in 2007. Over in Egypt, exports increased an astounding 117% from 2005 to 2006 (largely because of duty free access to the U.S. market), before cooling off in 2007, where it locked in a still impressive 22% spread.

Overall, 2007 was a good year for the world’s biggest apparel exporters, but with the U.S. subprime crisis ringing in the New Year, the industry will need to proceed with caution if it hopes to stay on course.

Curious about what the numbers look like for Indonesia, Turkey, Hong Kong and the rest of the world? Contact our team at research@panjiva.com for more info.

Thanks to growing demand from international markets a slew of Italian brands have been going public in hopes of raising both funds for expansion and brand awareness. After several failed attempts, Prada followed suit by announcing on Wednesday that it would go IPO sometime mid-June of 2008.

Last year may have been a signal of things to come when the husband and wife duo of Miuccia Prada and Patrizio Bertelli, who own 95% of the company, decided to sell the remaining 5% to Intesa Sanpaolo, for €100 million, at a valuation of €2 billion. For this deal they have again aligned themselves with some big guns. Goldman Sachs, UniCredit, and Intesa Sanpaolo are slated to be the global coordinators while Mediobanca will be Prada’s financial advisor.

As always our research team was intrigued about how our data could shed light on recent news events. We did a bit of digging last night and came up with some interesting statistics. For starters, it looks like shipments into the U.S. from premium apparel brands have spiked an startling 50% in 2007 after two years of relative stagnation.

Where are these garments coming from? According to our data, the majority of them are being shipped from Asia. The table below shows the Top 10 Sourcing Destinations (based on raw shipments) for premium apparel brands importing into the U.S.

*Data Source: Panjiva Analysis of data from U.S. Department of Homeland Security

It should come as no surprise that export giants Hong Kong and China dominate the list, but the fact that Bangladesh is so high up does pique our interest. These three countries also rank as the top three sourcing destinations (in varying orders) for mass (i.e. The Gap) and discount (i.e. Target) buyers. Egypt, Honduras, and Italy have the unique distinction of being the only non-Asian countries on the list. Meanwhile, a surprising no-show is India. In fact India only appears once on our list of Top Sourcing Destinations per Buyer Caliber. 

To learn more about our research on the sourcing behavior of apparel companies, please email our team at research@panjiva.com.

While browsing CNN.com earlier today, I came across a somewhat surprising headline, China’s Trade Surplus Soars. Given all the import horror stories from last year, I immediately assumed this was a typo, but my doubts were misplaced.

China’s trade surplus did indeed rise to a record 50% in 2007 (47.7% to be exact). Although slightly below the $300 billion forecast, China’s $262.2 billion surplus is still a number to behold.

Curious as to whether the same increase applied to the apparel industry, we got our research team on the case. Sure enough, they came up with some interesting results. When looking at total shipments from Chinese apparel suppliers to U.S. buyers, the raw numbers indicate:

100,033 shipments in 2005

144,730 shipments in 2006

251,366 shipments in 2007

In the language of percents, the apparel industry saw a 45% increase in Chinese shipments from ’05 to ’06 and an astounding 74% increase from ’06 to ’07.

What do the experts predict for 2008? In his interview with CNN, Citigroup economist, Yiping Huang, says “We are not expecting the surplus to decline substantially. We are still expecting the overall trade surplus to rise a bit further as 2008 progresses.”

For the time being it looks like China’s export-driven economy will see sustained growth – certainly good news for suppliers in that country.