The price of uniforms has been rising at an estimated annualized 0.7% in the three years to 2017, slightly hampering buyer power. Rising demand for uniforms has boosted prices, while falling raw material prices and stiff market competition have suppressed price growth.
Given that uniforms play an integral part of any business that desires to promote its brand name and image, strengthening business activity fuels demand for uniforms. In the past three years, improving economic conditions and rising consumer spending have encouraged businesses to expand their operations and hire more workers. With heightened foot traffic into their establishments, hotels, restaurants and retail shops have required more uniforms for their workers. Similarly, strengthening industrial production activity has facilitated demand for safety apparel as manufacturing companies have sought to provide their workers with adequate protection against hazards in the workplace. Meanwhile, demand for school uniforms has also picked up during the period. The rising popularity of school uniforms is partially attributed toward public schools’ efforts to reduce socioeconomic disparities, particularly in high-poverty areas. Furthermore, continual participation in sports, such as football and basketball, has supported demand for sports uniforms. Rising demand has allowed suppliers to increase uniform prices without risking a loss of business.
Despite increasing demand, the falling prices of key inputs have prevented more rapid price growth of uniforms. Because most uniforms are made from polyester and cotton, any changes in the prices of these inputs can significantly impact supplier production costs and subsequent uniform prices. During the past three years, record stockpiles of cotton and the falling prices of crude oil, which is used as the primary material in synthetic fiber production, have been sending cotton and synthetic fiber prices downhill. In turn, decreasing raw material prices have alleviated some of the pressure on suppliers to raise uniform prices more substantially.
Moreover, the overall price volatility of uniforms has been minimal in the three years to 2017. Low price volatility is partially attributed to stiff market competition, which prevents suppliers from raising prices more dramatically to stay competitive. Overall, buyers benefit from minimal price volatility because they can make more informed purchasing decisions without having to worry about potential price spikes.
The average price of uniforms is forecast to trend upward at a slightly faster annualized rate of 0.9% in the three years to 2020. In addition to increasing demand, changes in suppliers’ input costs will also contribute to future price growth. Fortunately for buyers, price volatility is projected to remain low.
During the next three years, business expansion is expected to continue in light of the strengthening economy and improving business sentiment. Rising disposable income will encourage consumers to spend on shopping, eating out and traveling. In turn, increasing consumer spending will encourage businesses to expand their operations and hire more workers, thus demanding more uniforms. In addition to strengthening business activity, tightening safety regulations in the workplace will compel employers to invest in proper safety apparel, boosting demand for protective uniforms. Meanwhile, the rising number of K-12 students and public schools’ efforts in adopting school uniforms across the nation will underpin demand for school uniforms. Additionally, growing participation in sporting activities will fuel demand for sports uniforms, further propelling growth in uniform prices.
Because polyester and cotton are the primary materials used in uniform production, changes in the prices of these key inputs will also impact uniform prices in the next three years. As demand from textile manufacturers picks up, synthetic fiber prices are projected to follow suit, prompting suppliers to raise uniform prices to protect their profit margins. At the same time, the world price of cotton is anticipated to continue trending downward, thus reducing some of the pressure on suppliers to lift uniform prices more substantially.
Although uniform prices are forecast to rise in the next three years, buyers should not expect any major swings in the pricing environment, which sustains their negotiation power. High market competition and growing import penetration will prevent domestic suppliers from raising uniform prices significantly. Therefore, buyers will be able to take the time to make more informed purchasing decisions without fear of sudden price spikes.