The apparel manufacturing industry is comprised of establishments primarily engaged in the manufacturing of clothing and clothing accessories, including establishments that knit clothing from yarn, and manufacture clothing from knit fabrics.
Primary product lines include fashion clothing; occupational clothing; technical outerwear; survival wear; active wear; foundation garments; tourism-related goods; backpacking and camping products; gloves; hats and caps; hosiery; and knitted goods. Technical textile has become an important contributor in the advancement of new apparel products for protection against external influences and for safety in the military, defence and security markets.
The North American Classification System (NAICS) code for this industry is 315—Clothing Manufacturing. This industry includes the following sub-sectors:
- 3151—Clothing Knitting Mills
- 3152—Cut and Sew Clothing Manufacturing
- 3159—Clothing Accessories and Other Clothing Manufacturing
|Economic Indicators||2016||2017||2018||2019||2020||% Change |
|% CAGR |
Disclaimer: Users of this data are advised to consult Statistics Canada tables, as data is revised periodically.
|Gross Domestic ProductFootnote 1||975.3||1,033.6||1,171.8||1,316.6||1,044.4||-20.7%||1.7%|
|Apparent Domestic Market||13,060||13,434||14,170||15,199||12,689||-16.5%||-0.7%|
|Domestic Market Share||4.5%||4.4%||4.9%||5.4%||5.8%||6.2%||6.5%|
|Manufacturing Intensity RatioFootnote 2||42.8%||42.5%||42.0%||42.8%||42.2%||-1.4%||-0.4%|
Economic overview and analysis:
The Canadian apparel manufacturing industry exhibited slow and stable growth in the years between 2016-2019 but experienced a significant decline in both retail volume and current value terms in 2020 due to the COVID-19 pandemic. Although Gross Domestic Product (GDP) increased at a Compound Annual Growth Rate (CAGR) of 1.7% during the 2016-19 period, it declined by 20.7% in 2020. Similarly, shipments also decreased by 19.6% during 2020.
COVID-19 significantly impacted the country’s labourforce, leading to permanent and temporary job losses that reduced the labourforce by 17.8% and caused the labour productivity rate to decline by 3.5% in 2020.
Canadian apparel manufacturers are becoming increasingly export-oriented to capitalize on international demand. Consumer demand for apparel, both domestically and internationally, is apparent as both total exports and total imports rose steadily over the 2016-2019 period. Domestic exports exhibited CAGR of 0.9%, signalling that demand for Canadian goods is on the rise internationally. The increased export orientation of Canadian companies, coupled with the Canada’s Apparent Domestic Market expanding at a CAGR of 6.5%, has made Canada a lucrative market for international apparel manufacturers.
Trends in the industry:
Canada is home to many successful apparel design and manufacturing companies. Several have internationally-renowned reputations, and their products are in high demand. Canada has distinctive fashion cultures centered around its largest fashion hubs in Toronto, Montreal and Vancouver. Whether they manufacture offshore or domestically, these companies maximize global value chains to source fabrics and provide manufacturing services, access warehousing and distribution, and invest in digital solutions in order to compete and sell globally and at home.
When looking more closely at the sub-set that manufactures domestically, over the past several decades these manufacturers have shifted to niche premium markets such as designer and hand-crafted products. Canadian strengths are found particularly in the following niches: performance outerwear, women’s fashion apparel and accessories, men’s tailored fine suits, uniforms and protective apparel. The economic data shows that this domestic manufacturing sector has stabilized following a downsizing that was felt strongest in the 1990s but is now growing again. In the five years prior to COVID, gross domestic product (GDP), shipments (production), domestic exports and labour productivity all increased. Canada will not compete in the manufacturing of fast fashion, but it is successful in other high value markets. A strong sustained demand is predicted for Canadian niche goods internationally as Canadian companies continue to focus on export markets.
The majority of apparel sold in Canada is imported, as is demonstrated by a 95% apparel import penetration figure for Canada’s domestic apparel market, which itself was valued in 2020 at $12.7 billion. Thus, 95% of the apparel bought in Canada, or $12.0 billion of apparel, was imported. This is compared to a Canadian production capacity of $2.4 billion.
In 2020, the COVID-19 pandemic initially put a stop to all consumer apparel manufacturing. Demand for discretionary mall-based consumer goods plummeted as the country went into lockdown mode, and non-essential businesses such as apparel retailers were mandated to close. Fashion apparel manufacturers that supply retailers were hit hard. Further, global supply chains of input materials were disrupted as international shipping costs skyrocketed. In Canada, emergency public procurements for essential personal protective equipment (PPE), specifically medical gowns, were put in place with domestic apparel and textile manufacturers. Even with this demand for PPE business, the closure of apparel manufacturing establishments had a negative impact on industry employment. Customer behaviour changed as lockdowns led to an increase in Canadians working from home and a significant increase in demand for casual attire and sportswear. Sales in formal wear dipped in demand and have yet to recover as the work-from-home trend continues. E-commerce apparel sales grew significantly in Canada. However, the larger brands and well-known retailers were mainly responsible for these figures. COVID has hit the majority of Canadian apparel manufacturing companies hard as evidenced by continued low monthly domestic export figures as compared to past years.
Going forward, topics of importance that will impact Canadian apparel manufacturing companies include capitalizing on investments in digital technologies, branding and marketing, expanding and diversifying exports, managing trade uncertainties, navigating through a transition to corporate social responsibility (CSR) and lower carbon footprint, and growth through investments in skills and product innovation.
Associations and other sites
- Apparel Innovation Centre Calgary, Alberta
- CTT Group (Centre of Excellence for Technical Textiles) Saint-Hyacinthe, Quebec
- mMode (Montreal fashion cluster) Montreal, Quebec
- The Canadian Apparel Federation Ottawa, Ontario
- The Chip and Shannon Wilson School of Design (Kwantlen Polytechnic University) Surrey, British Columbia
- Toronto Fashion Incubator Toronto, Ontario
- Vestechpro (Apparel Research and Innovation Centre) Montreal, Quebec