Fiber, Yarn, and Thread Mills (U.S.) — NAICS 313110

An investor's primer. Figures are U.S. federal statistics unless noted; forward-looking statements are labeled as judgments in the text.

1. Overview

This is the industry that turns raw fiber — cotton bales, wool, or synthetic staple and filament — into yarn (the continuous strand that gets woven or knit into fabric) and thread (the finished strand used to sew products together). It is the first conversion step of the textile supply chain: everything downstream, from a T-shirt to an airbag to a car seat, starts with yarn spun by a mill in this code.

It is a small, capital-intensive, and shrinking piece of U.S. manufacturing. Federal data put domestic industry receipts at roughly $6.6 billion in 2022 [1][2]. Employment estimates vary by source: County Business Patterns reported about 18,300 workers in 2023 [1], while BLS's industry-productivity series shows approximately 20,100 workers in 2025, down from 20,800 in 2024 [3]. It is also one of the most trade-exposed corners of American industry: the same free-trade rules that hollowed out U.S. spinning in the 1990s are, today, the main reason a domestic yarn industry survives at all (see §6–7).

Why an investor cares. For public-market investors, this is a niche, deeply cyclical, low-multiple corner of small-cap industrials — there is essentially one pure-play listed U.S. company (Unifi, Inc.), and it is a sub-$100 million market-cap turnaround story, not a broad sector [4][5]. For private investors, the real industry lives here: the largest operators — Parkdale Mills, American & Efird, National Spinning, Buhler — are privately or foreign-owned, and the way to participate is through ownership, supplier relationships, real estate, or distressed/roll-up plays rather than a stock ticker. The honest framing is that this is a specialist's industry, not an index sector.

2. What it is and how it's structured

In scope (NAICS 313110): establishments that (1) spin natural, synthetic, or blended fibers into yarn; (2) manufacture thread of any fiber; (3) texturize, throw, twist, and wind purchased yarn or man-made filament (adding stretch, bulk, or strength); (4) spin specialty and industrial yarns — sewing, embroidery, knitting, and carpet yarns; and (5) produce hemp yarn, including further processing into rope or bags [6][7][8].

The conversion process. A conventional staple-spinning mill opens compressed bales, cleans and blends the fibers, cards them into a continuous web, draws that material into sliver, sometimes combs it, and then spins it using ring, open-end/rotor, air-jet, or vortex machinery. Yarn is wound onto packages and may be doubled, twisted, dyed, waxed, or otherwise prepared for downstream knitting and weaving. Filament operations instead buy partially oriented yarn or other continuous filaments and add bulk, elasticity, strength, appearance, or processability through texturizing, throwing, twisting, and heat-setting. Thread mills generally ply and twist yarn more tightly and may lubricate, dye, bond, or finish it for sewing or technical applications [8].

What it explicitly excludes (important, because the boundaries are where the money and the miscounts sit):

• Making the synthetic fiber itself — polyester, nylon, or rayon chips and filament — is NAICS 325220, Artificial and Synthetic Fibers and Filaments Manufacturing. A yarn mill buys those filaments; a 325220 plant creates them [6].
• Weaving or knitting fabric is NAICS 3132 (Fabric Mills).
• Cut-and-sew products (sheets, towels, apparel) are NAICS 314 / 315.
• Growing the cotton is agriculture (NAICS 111920).

Ownership mix. This is a private-industry business. The federal count is roughly 215 firms operating ~250 establishments [1][2] — mostly family-owned domestic spinners (Parkdale), U.S. arms of foreign yarn houses (Buhler, a subsidiary of Switzerland's 200-year-old Hermann Bühler), employee-owned specialists (National Spinning, whose core business has shifted to engineered nonwovens) [9], and private-equity-backed platforms (American & Efird under Elevate Textiles). One meaningful public company, Unifi, exists. The industry is old, consolidated, and concentrated in the Southeast — the Carolinas, Georgia, and Virginia.

3. How big it is

Two things stand out. First, concentration is top-heavy but not monopolistic: the top four firms make more than half of output, yet the HHI of 952.5 sits below the U.S. Department of Justice's 1,000 "unconcentrated" line — because below the leaders sit ~200 smaller mills. Second, the whole industry is "small business" by federal definition: the SBA size standard is 1,250 employees, and with employment spread across 250 plants (about 73 per plant), only the very largest operators approach that line [1][12].

The undercount caveat — read this carefully, because it cuts both ways. Unlike restaurants or trades, this industry is not undercounted by tiny/informal operators or by government ownership; it is real, incorporated, capital-intensive plants, and the Census captures them well. The distortions are different:

• The federal figure counts only U.S. soil. America's largest spinner, Parkdale Mills, runs roughly 29 plants across the U.S., Mexico, Central and South America producing more than 8,000 tons a week; only its domestic plants land in this code [13]. Unifi and American & Efird likewise run large operations in Brazil, El Salvador, and Asia [4][14]. So the U.S. code understates the global footprint of U.S.-headquartered yarn companies.
• Captive spinning is misclassified. Vertically integrated mills that spin yarn only to feed their own looms are often classified by their primary product (fabric), not here — so some domestic spinning capacity sits outside 313110.

Private market-research houses size the "yarn & thread mills" market at roughly $6 billion, consistent with the federal receipts figure [15]. The most common misreporting is to call the entire fiber-to-apparel supply chain "NAICS 313110." It is not. Broad figures such as $60+ billion of U.S. fiber, textile and apparel shipments are supply-chain totals spanning NAICS 313 through 315, not the market size of fiber, yarn, and thread mills alone [16].

4. The investable universe

There are very few public ways in. The table separates the one listed pure-play from the private and foreign-owned operators that actually dominate the industry.

Bottom line for public investors: the sector is effectively un-investable through equities beyond a single micro-cap. Broader textile exposure has to be built downstream (branded apparel, technical-textile makers) or upstream (the man-made-fiber and chemical producers in 325220, e.g., large diversified chemical companies). There is no U.S. yarn-mill ETF.

5. How the money works

Yarn spinning is a conversion (spread) business, and the economics are those of a commodity processor, not a brand:

• The spinning margin (conversion spread). A mill buys fiber (cotton, or purchased polyester/nylon filament) and sells yarn. Profit is the gap between the yarn selling price and fiber cost, minus conversion costs. Because both ends are commodity-priced, mills have little pricing power and live or die on the spread and on volume. The BLS producer-price index for cotton spun yarn stood at 82.2 in June 2026 (May 2022 = 100), indicating selling prices roughly 18% below that base period [20].
• Capacity utilization is everything. Spinning is highly automated and capital-heavy — the fixed cost of the plant and machines is large, so running the mill full spreads that cost and is the single biggest driver of profitability. Idle spindles bleed cash fast; it's why struggling mills close outright rather than run half-full. Unifi's recent Americas segment has posted gross loss margins of 3.8% (FY2023), 5.1% (FY2024), and 5.8% (FY2025), which management attributed largely to poor manufacturing utilization and transition-related productivity problems [4].
• Input costs: fiber and, increasingly, energy. Cotton and polyester prices swing the top line. Cost increases can often be passed through, but typically with a lag of up to two fiscal quarters, temporarily compressing margins [4]. But the story of the 2020s is electricity: spinning is energy-intensive, and several 2024–26 U.S. plant closures were blamed explicitly on rapidly rising energy costs making the domestic model "unsustainable" [18][21][22].
• Labor is a shrinking line. Automation has cut labor to a fraction of what it was; surviving mills invest heavily in machinery precisely to strip labor out. Average pay is ~$43,000–44,000 [1][11]. The number of textile mills has roughly halved since 1997 while employment fell about three-quarters, as the survivors mechanized [23]. In 2025, BLS data show NAICS 3131 output fell 4.2%, hours worked fell 3.0%, labor productivity declined 1.2%, and unit labor costs rose 8.9% [3].
• Government money is part of the model. Two federal streams flow directly to U.S. spinners: (1) the Economic Adjustment Assistance for Textile Mills (EAATM) payment to domestic upland-cotton users, raised from 3¢ to 5¢ per pound effective August 2025 — its first increase since 2008 — usable for plant and equipment investment [24]; and (2) tariff protection plus "yarn-forward" trade rules that manufacture captive demand (see §6–7). For a marginal mill, these are the difference between profit and closure.

Because the spread is thin and cyclical, the surviving strategy is either scale and low cost (Parkdale's commodity model) or differentiation — engineered performance yarns, recycled/sustainable content (Unifi's REPREVE), and fine-count premium yarns (Buhler) that command a margin over commodity spun yarn [4][15].

6. What drives demand

• The downstream textile chain. Yarn demand is derived from fabric, apparel, home textiles, and industrial-goods production. When U.S. and regional garment and fabric output softens, yarn orders fall first. U.S. textile-plus-apparel shipments were $63.9 billion in 2024, down 1.3% year-over-year, with textile-mill shipments about $25 billion [16]. Near-term demand reflects downstream inventory cycles, not simply retail sales — apparel brands and fabric mills can destock for several quarters after consumer demand has stabilized [4].
• "Yarn-forward" trade rules — the demand engine. Under CAFTA-DR (Central America) and USMCA (Mexico/Canada), apparel gets duty-free access to the U.S. only if the yarn and everything forward is made within the region. This "yarn-forward" rule of origin turns U.S. spinners into the mandatory supplier for a nearshore apparel bloc — the single most important structural source of demand for domestic yarn [25][26]. USMCA additionally requires, since 2021, that originating sewing thread be used in qualifying apparel [27]. U.S. yarn exports were ~$4.0 billion in 2024, much of it feeding this Western-Hemisphere co-production chain [16].
• The long-term volume story is poor. USDA estimated domestic cotton mill use at 1.9 million 480-pound bales in 2023/24, the lowest level in nearly 140 years. USDA attributes the decline to synthetic-fiber substitution and, especially, the migration of spinning, fabric, and apparel production overseas after textile and apparel import quotas were phased out [28]. By 2026, exports accounted for more than 85% of demand for U.S. raw cotton, versus less than 40% in the 1990s, because much of the spinning now occurs abroad [29].
• Reshoring and de-risking from China. Nearshoring apparel to Mexico and Central America — accelerated by tariffs and forced-labor enforcement against Chinese inputs — pulls yarn demand back toward U.S. mills [25][30].
• Technical and industrial textiles — the growth pocket. Commodity apparel yarn is flat-to-declining, but industrial/technical yarns (automotive airbags and seatbelts, medical, filtration, geotextiles) are the fastest-growing use, and the U.S. technical-textiles market is projected to grow at a mid-single-digit annual rate through the early 2030s [31]. This is where differentiated domestic spinners are steering.
• Sustainability mandates. Brand commitments to recycled content have created a real demand line for recycled yarns — the core of Unifi's REPREVE franchise, which management is targeting to exceed half of sales by 2030 [4][17]. Whether that target is met is a forward-looking judgment. Unifi's REPREVE sales declined from $188.5M in FY2024 to $174.9M in FY2025, cautioning against treating recycled fiber as automatically high-growth or recession-proof [4].

7. Regulation

Regulation here is overwhelmingly trade policy, and it is unusually favorable to domestic spinners:

• Rules of origin (yarn-forward). As above, CAFTA-DR and USMCA condition duty-free apparel on regional yarn — effectively a demand subsidy for U.S. spinning. These rules contain de minimis, short-supply, and product-specific exceptions [25][26][27].
• Section 301 China tariffs. Penalty tariffs on Chinese textiles and apparel — reaching very high headline rates in 2025 — shift sourcing toward domestic and nearshore supply, which the domestic industry's trade group (NCTO) actively lobbies to keep and expand [30].
• The de minimis loophole — closing. The rule that let sub-$800 shipments enter duty-free (used heavily by Chinese fast-fashion platforms) was ended for China in May 2025 and is being repealed for all countries, codified to take full effect by July 2027 [30]. Domestic mills view this as removing a major distortion that undercut them.
• Government-content rules. The Berry Amendment requires 100% U.S. content for Department of Defense textiles, and the Kissell Amendment applies a similar rule to some Department of Homeland Security purchases — a protected, all-domestic demand niche for qualifying mills [25].
• Farm-bill support. The EAATM cotton payment (§5) is a recurring USDA program benefiting domestic cotton spinners [24].
• Environmental and safety regulation. Cotton mills face a specific occupational-health burden: OSHA's cotton-dust standard (29 CFR 1910.1043) applies in full to yarn manufacturing and requires exposure controls, monitoring, medical surveillance, and recordkeeping [32]. Mills using wet cleaning, dyeing, or finishing processes may also fall under EPA's Textile Mills Effluent Guidelines and NPDES permitting, although dry spinning alone is less wastewater-intensive than textile finishing [33]. Standard manufacturing regulation (environmental permitting, energy/utility policy) otherwise applies but is not distinctive to the industry.

The forward-looking risk cuts both ways: this industry is a policy beneficiary, so its fortunes are unusually sensitive to trade-agreement renegotiation. USMCA's scheduled joint review is a live event the industry is lobbying to tighten rather than loosen [34].

8. Competitive dynamics and consolidation

The dominant dynamic is a decades-long, ongoing shakeout. U.S. textile employment has fallen from millions at mid-century to roughly 471,000 across the entire textile-and-apparel supply chain in 2024, with the sharpest yarn/fabric-mill losses following NAFTA in the 1990s [23][16]. The number of mills has halved since 1997 [23].

That consolidation continues in real time. In 2024–2026, even market leader Parkdale Mills closed multiple U.S. plants — Sanford, NC (74 jobs); Walnut Cove, NC (72); its Mountain City, TN Plant 16 (300+); and a 109-year-old Hillsville, VA facility (68) — several blamed on rising energy costs rendering the plants uncompetitive [13][18][21][22]. Unifi has simultaneously restructured and cut its U.S. footprint while pushing into higher-value recycled and performance yarns [4][17].

The competitive logic:

• Scale commodity players (Parkdale) win on cost but are exposed to energy and fiber swings and to Asian import competition on plain yarn.
• Differentiators (Unifi's REPREVE, Buhler's fine-count, A&E's specialty thread) defend margin by selling engineered, branded, or sustainability-certified yarn that commodity importers can't easily replicate.
• Barriers to entry are high (capital, energy contracts, customer qualification) but so are exit costs, so adjustment happens through plant closures and roll-ups, not new entrants. Private-equity consolidation (Elevate Textiles) and foreign strategic ownership (Buhler) are the main sources of fresh capital.

9. Risks

• Structural import competition. Cheap yarn and, more importantly, cheap finished apparel from Asia is the permanent headwind; the domestic industry's survival is tied to policy staying protective [23][30].
• Energy cost exposure. Spinning's electricity intensity has become a first-order threat — the proximate cause of several 2024–26 closures [18][21][22].
• Trade-policy reversal. Because demand leans on yarn-forward rules, Berry/Kissell content rules, and Section 301 tariffs, any weakening in a USMCA/CAFTA renegotiation or a rollback of tariffs would hit demand directly [25][34]. This is the central forward-looking risk.
• Commodity margin squeeze. Cotton and polyester price swings compress the thin spinning spread; mills have little pricing power. Repricing lags of up to two quarters can temporarily compress margins even when costs are eventually passed through [4][15].
• Input sourcing concentration. Dependence on qualified regional suppliers for CAFTA-DR, USMCA, and Berry Amendment-compliant products narrows sourcing flexibility. Partially oriented yarn, chip, dyes, and chemicals are identified as limited-source risks [4].
• Cyclicality and thin balance sheets. Yarn demand tracks apparel and industrial cycles; the one public play trades near cash and has posted losses, illustrating how little margin for error the sector carries [4][5].
• Concentration/customer risk. A shrinking downstream customer base (fewer U.S. weavers, knitters, and cut-and-sew operators) leaves mills dependent on a handful of buyers and on the nearshore apparel bloc holding together.

10. How to invest and the outlook

Public-market routes (limited):

• Unifi (NYSE: UFI) is the only listed pure-play — a micro-cap, deep-value/turnaround situation levered to a recycled-yarn thesis (REPREVE) and to trade policy. Investors are buying a geographically diversified synthetic and recycled-fiber company with substantial adjacent-product exposure and recent negative Americas gross margins, making it a restructuring and utilization-recovery investment rather than a clean industry beta. It is a speculative small-cap, not an income or index holding [4][5][17].
• Adjacent public exposure: upstream man-made-fiber and chemical producers (NAICS 325220) and downstream branded apparel and technical-textile companies give broader, more liquid exposure to the same value chain without the single-mill risk.
• There is no U.S. yarn-mill fund or ETF; pure exposure is not available through diversified vehicles.

Private-market routes (where the industry actually is):

• Direct ownership / acquisition of privately held mills, many of which are family-owned and facing succession or consolidation pressure — a classic small-cap buy-and-improve or distressed opportunity.
• Supplier, off-take, and real-estate angles — long-lived Southeastern industrial plants, and financing tied to nearshore apparel co-production.
• PE roll-ups consolidating differentiated (technical, sustainable, specialty-thread) capacity, following the Elevate Textiles template.

Due diligence should be plant-specific: machine age and configuration, power price, utilization, qualified-customer status, fiber procurement, waste rate, labor availability, environmental obligations, and eligibility under regional or government-procurement origin rules matter more than a generic textile-market growth forecast.

Near-term drivers (facts to watch; the read-through is a judgment): the July 2027 full repeal of de minimis and continued high Section 301 tariffs should tighten import competition in domestic yarn's favor [30]; the EAATM payment increase to 5¢/lb supports domestic cotton-spinner capex from August 2025 [24]; nearshoring momentum and technical-textile growth are the demand tailwinds [25][31]; and energy costs plus any USMCA renegotiation are the swing risks [21][34].

The honest outlook: this is a mature, policy-dependent, consolidating industry, not a growth sector. The base case is continued shrinkage of commodity spinning offset by pockets of growth in recycled, performance, and industrial yarns — with the whole industry's floor set less by market forces than by how protective U.S. trade policy chooses to remain. Investors should treat it as a specialist, contrarian, or private-ownership play rather than a broad allocation.

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Sources

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