Based on a weighted basket of 14 currencies, the inflation-adjusted value of the U.S. dollar grew 7.5% in 1997 and 11% in 1998, for its largest rise since the mid-1980s. The biggest gains were against Southeast Asian currencies, such as those of Indonesia and Thailand.

Statistical modeling of the impact of the dollar and other factors on domestic cotton consumption from 1975 to 1998 shows that each 10% rise in the dollar’s value effects a 7% decline in cotton consumption in the following year. From 1979 to 1986, the overall increase in cotton usage at the consumer level was 48%. However, mill usage increased only 7%, as a result of a 45% rise in the dollar. The balance was supplied by rapidly increasing imports. From 1986 to 1997, consumer demand for cotton grew 69% and U.S. mill consumption increased 64%, aided by a 19% fall in the value of the dollar. Imports increased as well, but at about the same overall rate as domestic consumption.

The statistical model suggests that the 11% rise in the dollar in 1998 will be felt in 1999 cotton consumption. Assuming a 3% gain in the overall demand for cotton, the model predicts that U.S. cotton textile consumption will fall to 10.2 million bales, the lowest level since 1992 and about 700,000 bales below consumption in calendar year 1998.

Some signs point to optimism for 2000. Recent data indicate that foreign currencies are beginning to recover or stabilize against the dollar. If current exchange rates hold throughout 1999, the annual dollar value will be 3% below 1998. As a result, mill usage should be higher in 2000. Assuming the consumer market rises another 3%, mill usage of cotton is expected to increase to 10.7 million bales in 2000. Usage will grow even more if the recovery in foreign currencies to date continues throughout the year.

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Lifestyle Monitor^TM Questions
Profile: Baby Boomers vs. Generation X

Cotton Incorporated's Lifestyle Monitor^TM contains 125 questions desgined to help us better understand the textile consumer.  This section reports on two selected questions that illustrate textile consumers' attitudes and behavior.

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Since the inception of the Lifestyle Monitor in 1994, the majority of Generation X and the Baby Boomers have accepted casual days in the workplace. However, the percentage of consumers who accept casual days is significantly higher (statistically) in Generation X than among their older counterparts. When these consumers are asked if people have begun dressing too casually on casual day, the same percentage (60%) for both groups say no.	When consumers are asked "If you had $500 to spend on anything you wanted, how much would you spend on clothing?" most say less than half. Since 1994, Generation X would spend on average just $10.00 more of the $500 on apparel than Baby Boomers would. When given a choice of items to shop for (clothes, electronics, shoes, furniture, or groceries), the majority of consumers choose clothes. However, the second item for Generation X is electronics, while Baby Boomers choose groceries.

Textile Consumer - April  1999