Cut and Sew Apparel Manufacturing (except Contractors) — U.S. Industry Primer

NAICS 2022 code 31525. NAICS = North American Industry Classification System, the standard code set U.S. statistical agencies use to define industries. This is a five-digit "industry" level; the six-digit code beneath it holds the full detail.

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1. Overview

This level is the business of making finished clothing from purchased fabric — cutting, sewing, and selling ready-to-wear garments — done by firms that own the goods they produce, as opposed to job-shop contractors who merely sew for others. In plain terms: the domestic clothing factory, plus the "design-and-arrange" clothing company (a "jobber") that owns the product but hires out the sewing.

The one fact every investor should hold onto: the U.S. clothing market is roughly $362–366 billion at retail, but only about 2.5% of clothing sold here is actually made in the United States (~97.5% imported) [1]. The United States imported $79.3 billion of apparel in 2023, mostly from Asia: China supplied $16.9 billion (about 21%), China and Vietnam together supplied just under 40%, and Bangladesh, Cambodia, India, Indonesia, and Pakistan collectively supplied $21.4 billion (27%) [2]. So the measured U.S. manufacturing industry is small and shrinking, and the famous "apparel companies" a stock investor knows are mostly brand marketers whose garments are sewn offshore — largely outside this domestic footprint.

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2. What's inside — and why this level equals its one child

A five-digit NAICS industry can hold several six-digit national industries. This one holds exactly one:

• 315250 — Cut and Sew Apparel Manufacturing (except Contractors)

Because there is a single child, NAICS 31525 and NAICS 315250 are effectively the same industry — same scope, same firms, same federal statistics. This page is a short rollup; for the full detail — structure, the investable universe, unit economics, regulation, and risks — read the 315250 primer. Everything below is the level's own ground-truth numbers plus a map of where to look.

For context, this industry is one slice of the broader Apparel Manufacturing subsector (NAICS 315). Its closest neighbors, which it deliberately excludes, are 315210 (Cut and Sew Apparel Contractors — shops that sew fabric owned by others for a fee), 315120 (Apparel Knitting Mills), and 315990 (Apparel Accessories and Other Apparel) [see 315250, §2].

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3. Size (this level's rollup figures)

Our federal figures for NAICS 31525 — the U.S. domestic footprint only:

CR4/CR8 = the combined revenue share of the four (or eight) largest firms. HHI = a 0–10,000 concentration gauge where higher means more concentrated. An HHI of 84.3 and a CR4 of just 13.2% make this one of the most fragmented manufacturing industries you will find — no dominant player, a long tail of small shops.

Because this level has a single child, its establishment- and employee-level detail is identical to 315250's: roughly 1,336 plants, ~24,900 workers, and $1.15 billion of annual payroll (County Business Patterns 2023) [see 315250, §3] — implying about $46,000 average pay per worker and ~$3.3 million revenue per plant. The U.S. Small Business Administration (SBA) sets the "small" cutoff here at 750 employees, so essentially every firm in this industry is a small business.

Undercount / context caveat (important). These statistics count only clothing physically produced in the U.S. They are not the size of the American clothing business. The U.S. apparel market is ~$362–366 billion at retail, ~97.5% imported [1]; the multi-billion-dollar revenues of the branded companies below flow through offshore production and U.S. wholesale/retail channels, so they sit outside this $5.48 billion figure. Read the number as "the surviving domestic sewing base," not "the industry an equity investor trades." Because ownership is overwhelmingly small, private, and single-location, the true domestic footprint may also be modestly under-captured. The base is still shrinking: U.S. apparel manufacturing output fell about 17% in 2025 by one industry index [4], and BLS projects apparel-manufacturing employment (broader NAICS 315) to decline from 84,500 in 2024 to 58,800 in 2034 — a loss of 25,700 jobs, or 30.4% [5].

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4. Investable universe (where value concentrates)

With a single child, all of this level's investable exposure is the 315250 map — there is nothing to aggregate across siblings. The key point: there is essentially no large, pure-play, publicly traded U.S. apparel manufacturer. The public names that technically qualify here (as "jobbers") design, source, and market clothing but manufacture predominantly offshore — treat them as branded consumer-discretionary equities, not domestic-factory exposure: VF Corporation (VFC, sourcing from ~273 facilities in ~30 countries), PVH Corp. (PVH), Ralph Lauren (RL), Levi Strauss (LEVI, sourcing nearly all products through independent contract manufacturers), Gildan Activewear (GIL), Columbia Sportswear (COLM), Kontoor Brands (KTB, ~30% internal manufacturing, ~70% from ~210 contract factories across 19 countries), Carter's (CRI), Oxford Industries (OXM), Guess? (GES), and G-III Apparel (GIII) [see 315250, §4].

Uniform-service companies (indirect exposure). Investors seeking exposure closer to domestic manufacturing may consider uniform-rental and workwear-service companies, though their economics are primarily recurring services rather than merchant apparel sales. Cintas (CTAS) operates five manufacturing facilities for standard uniform requirements; UniFirst (UNF) reported manufacturing approximately 62% of the garments it placed in service during fiscal 2025 — but both are primarily recurring uniform-service businesses rather than merchant apparel factories [see 315250, §4].

The genuinely U.S.-manufacturing side is largely private and small: contract sewing shops, the Los Angeles garment cluster (~45,000 workers), "Made in USA" direct-to-consumer brands (e.g., American Giant, Los Angeles Apparel), and Berry-compliant defense/uniform suppliers. Exposure there usually means private equity, direct ownership, or a supplier relationship — not a stock ticker. See the 315250 primer for the full company table and private-owner detail.

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5. How the money works

Two engines sit under this code, earning money in opposite ways:

• The domestic cut-and-sew maker. Revenue is the wholesale price per garment; the core cost is CMT — cut, make, trim (factory labor plus overhead per unit). Because U.S. sewing wages are a large multiple of Asian wages, domestic makers can't win on price. They earn on speed/replenishment, small-batch runs too short to import economically, a "Made in USA" premium, and compliant contracts that must be domestic. Thin, labor-sensitive margins driven by capacity utilization and input costs (cotton, oil-linked synthetics, tariffs on imported inputs). USDA's July 2026 outlook forecasts world cotton production of 117.3 million bales against mill use of 122.0 million bales, with ending stocks down 6% — indicating prospective fiber-market tightness [6].
• The branded jobber (the public names). Value sits in brand, design, and IP; sewing is outsourced. Healthy branded-apparel economics run roughly 60–70% gross margin at retail and ~40–50% at wholesale; for illustration, Kontoor Brands' 2024 gross margin was 44.5% and consolidated operating margin was 13.1% [see 315250, §5]. The levers are brand pricing power, direct-to-consumer (DTC) mix, inventory/markdown discipline, and sourcing cost (duties, freight, factory prices).

Full unit-economics detail — bill of materials (BOM), free-on-board (FOB) price, landed cost — is in 315250, §5.

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6. Demand drivers

• Consumer discretionary spending — clothing is cyclical and deferrable; sales track income, employment, and confidence, and inventories whipsaw.
• Fashion cycles and seasonality — trend, weather, and holiday/back-to-school peaks drive volume and markdown risk.
• The import gap — with ~97.5% of clothing imported [1] ($79.3 billion in 2023 [2]), demand for domestic output specifically is a niche created by speed, small runs, and "Made in USA" preference, not by overall clothing demand.
• Trade policy and tariffs — the most powerful near-term swing factor. Average U.S. apparel-import tariffs rose from ~14.7% in January 2025 to ~35.1% by December 2025 [4], the highest in decades — a potential tailwind for domestic makers and a headwind for import-reliant brands.
• Institutional / mandated demand — federal purchasing (military uniforms, government workwear) is a durable, domestic-only demand floor (Section 7).

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7. Regulation

Apparel is lightly capital-regulated but carries meaningful labeling, safety, labor, and trade rules — all identical to 315250's, since the levels are the same industry:

• FTC labeling (Federal Trade Commission) — the Textile Fiber Products Identification Act requires fiber content, manufacturer/marketer identity, and country of origin; the Care Labeling Rule requires cleaning instructions.
• Product safety (CPSC — Consumer Product Safety Commission) — the Flammable Fabrics Act sets clothing flammability standards, with stricter children's-sleepwear rules; children's apparel also triggers CPSIA (Consumer Product Safety Improvement Act) testing.
• Forced-labor / import rules (UFLPA — Uyghur Forced Labor Prevention Act) — presumes goods tied to the Xinjiang region are barred from U.S. entry, with no de-minimis exception to the ban itself; apparel and cotton are high-priority enforcement sectors for U.S. Customs and Border Protection, raising import compliance cost and modestly favoring verifiable domestic supply [7].
• Domestic-sourcing mandates (Berry Amendment) — most Department of Defense (DoD) clothing must be entirely U.S.-sourced and U.S.-made. Defense Logistics Agency data show fiscal-2024 obligations of $101 million under NAICS 315250, compared with $624 million under the contractor code 315210 [8] — illustrating that much defense sewing flows through the contractor channel, but both codes sustain a domestic factory base that would otherwise struggle. "Berry-compliant" capability is a genuine moat.
• Labor law (state) — California's SB 62 banned piece-rate pay for garment workers and extended wage-violation liability up the chain to brands, raising cost in the Los Angeles cluster.

Full statutory detail and citations are in 315250, §7.

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8. Consolidation

At the making stage, competition is brutal and global; the binding constraint is a labor-cost gap that scale cannot close — which is why the industry is so fragmented (CR4 13.2%, HHI 84.3) [3] and why headcount and output keep falling [4][5]. Survivors specialize (defense/uniform, technical/protective wear, fast-turn replenishment, premium "Made in USA") rather than chase commodity volume.

At the brand stage, consolidation is the story: value has migrated from factories to brands, and the branded owners keep buying scale — Gildan completed its acquisition of HanesBrands on December 1, 2025, roughly doubling its size and targeting ~$200 million in cost synergies [9]. Meanwhile weaker mixed operators fail — Delta Apparel filed Chapter 11 in mid-2024, was delisted, and sold its Salt Life brand for ~$38.7 million [10]. Expect continued bifurcation: bigger sourcing-efficient brand platforms on top; a thinning tail of small domestic manufacturers below.

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9. Risks

• Structural import competition — ~97.5% import penetration [1] and a persistent labor-cost disadvantage that keeps shrinking the domestic base [4][5].
• Cyclicality and inventory/markdown risk — discretionary demand is volatile; overbought inventory forces margin-destroying markdowns.
• Tariff / trade-policy whiplash — now the dominant variable, cutting both ways (tailwind for domestic makers, direct margin hit for import-reliant brands); policy can change fast [4].
• Input-cost volatility — cotton, oil-linked synthetics, and freight move factory costs directly; USDA projects tightening cotton supply [6].
• Compliance and legal exposure — UFLPA detentions, CPSIA/flammability liability, and SB-62-style wage-liability laws.
• Small-firm fragility — most firms are tiny and thinly capitalized [3], vulnerable to demand shocks, credit tightening, and key-customer loss.
• Fashion / brand risk (public names) — a jobber's value is its label, and labels are perishable.
• Labor constraints — sewing remains skill-intensive, and the long contraction in domestic apparel manufacturing has reduced the available workforce and supplier ecosystem.

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10. How to invest & outlook

Public routes are plentiful but almost entirely brand plays — judge the Section 4 equities as consumer-discretionary brand businesses (brand strength, gross margin, inventory discipline, DTC mix, tariff exposure), not domestic-factory bets, because their goods are mostly made offshore. Uniform-service companies (CTAS, UNF) offer somewhat closer manufacturing exposure, but their economics are primarily recurring rental and service revenue. Tariff-resilient, verifiably U.S.-produced public exposure is very thin (e.g., micro-cap Digital Brands Group's Los Angeles production); broad apparel or consumer-discretionary funds are the diversified alternative.

Private routes are where real domestic-manufacturing exposure lives: backing contract sewing shops, "Made in USA" brands, or Berry-compliant defense/uniform suppliers — a thesis resting on speed-to-market, small-batch flexibility, compliance moats, and any durable tariff-driven reshoring premium, not on out-competing imports on price.

Outlook. Tariffs are the swing factor, but 2025 evidence is that sourcing shifts between low-cost countries far more readily than it returns home [4]; forced-labor enforcement modestly favors domestic supply; consolidation continues at the brand tier. BLS projects a 30% decline in apparel-manufacturing employment by 2034 [5]. Net judgment: the domestic manufacturing base is likely to stay small and specialized — defended by policy and niche demand rather than restored to scale. The investable action remains overwhelmingly on the branded, import-sourced side.

For the complete treatment of every section above, read the child primer: NAICS 315250 — Cut and Sew Apparel Manufacturing (except Contractors).

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Sources

1. AllAmerican.org, "State of American Clothing Manufacturing Report" (2025) — ~2.5% domestic / ~97.5% imported; firm-size distribution. https://allamerican.org/research/clothing-manufacturing-report/
2. U.S. International Trade Commission, "U.S. Imports for Consumption of Textiles and Apparel" (2023). https://www.usitc.gov/sites/default/files/publications/332/pub5543_0.pdf
3. U.S. Census Bureau, 2022 Economic Census, Concentration statistics, NAICS 31525/315250 (receipts $5,480,617k; 1,678 firms; CR4 13.2%, CR8 19.8%, CR20 33.1%, CR50 52.1%; HHI 84.3). Our ground-truth federal stats for this level. https://www.census.gov/programs-surveys/economic-census.html
4. WWD / Sourcing Journal, "US Apparel Manufacturing Fell 17% in 2025" (Kearney Reshoring Index; tariff rise 14.7%→35.1%) (2026). https://wwd.com/sourcing-journal/trade/kearney-reshoring-index-usa-domestic-apparel-manufacturing-1238945612/
5. U.S. Bureau of Labor Statistics, "Industries with the fastest projected employment declines, 2024–2034" (NAICS 315: 84,500→58,800, -30.4%). https://www.bls.gov/emp/tables/industries-fast-decline-employment.htm
6. USDA Economic Research Service, "Cotton and Wool Market Outlook" (July 2026; production 117.3M bales, mill use 122.0M, ending stocks down 6%). https://www.ers.usda.gov/topics/crops/cotton-and-wool/market-outlook
7. CSIS, "Assessing the Impact of the Uyghur Forced Labor Prevention Act After Three Years" (2025); U.S. Customs and Border Protection UFLPA guidance. https://www.csis.org/analysis/assessing-impact-uyghur-forced-labor-prevention-act-after-three-years
8. Defense Logistics Agency, Clothing and Textiles Small Business Report FY2024 (NAICS 315250 obligations $101.0M; 315210 obligations $624.3M). https://www.dla.mil/Portals/104/Documents/SmallBusiness/DB%20Flyers/2025%20Flyers/CandT%20SB%20-%20V-11-14-2025.pdf
9. GlobeNewswire / Gildan Activewear, "Gildan Completes the Acquisition of HanesBrands" (Dec 1, 2025; ~$200M synergy target). https://www.globenewswire.com/news-release/2025/12/01/3197119/0/en/Gildan-Completes-the-Acquisition-of-HanesBrands.html
10. ASI / PPAI, "Delta Apparel Files for Chapter 11 Bankruptcy" and Salt Life sale (~$38.74M to Iconix) (2024). https://www.ppai.org/media-hub/delta-apparel-files-for-chapter-11-bankruptcy-plans-to-sell-salt-life-brand/

Additional figures cited as "[see 315250, §N]" are drawn from and fully sourced in the child primer for NAICS 315250 (County Business Patterns 2023 establishment/employment/payroll data; the branded-company revenue table and sourcing detail; Kontoor Brands margin data; uniform-service company filings; FTC/CPSC/UFLPA/SB 62 regulatory detail).