Delving into the clothes basket – tracking women’s and men's clothing in the CPI

This article looks at different types of women’s and men’s clothing priced in the CPI basket, and some of the major price movements over time.

The earliest official collection of data on clothing prices started in 1918, including retrospective collection back to 1914. Prices were collected in the four main centres: Auckland, Wellington, Christchurch, and Dunedin. Together with other key commodity groups (including food, housing (rent), fuel, and light) this data was initially used by the Arbitration Court for wage rate adjustments.

In 1924, the clothing commodity group was incorporated into what was then the retail prices index and published quarterly.

The clothing subgroup from the early days

In 1924, the clothing commodity group included categories for: ‘men and boys’ and ‘women and girls’. For both categories, price data was collected for items of ‘overwear’ and ‘underwear’. Table 1 lists the items that were included.

Table 1: Clothing group in 1924

Table 1 shows that men’s overwear in the 1920s consisted of finished garments, indicating men’s clothes were mainly purchased from shops that stocked factory-made clothes or offered tailor-made clothes. In contrast, women’s overwear products were fabrics, indicating the majority of women made their own and girls’ clothes.

Since the 1920s, the clothing group’s composition has continued to change, reflecting changes in clothing fashion and expenditure. It was in the early 1940s that we started collecting prices for women’s ready-made clothes. At this time the clothing group was separated into five categories: men’s wear, women’s wear, boys’ wear, girls’ wear, and household drapery.

In 1949, when the index was renamed the consumers price index (CPI), as it still is today, the clothing subgroup was separated into the following five categories: men’s clothing, women’s clothing, boys’ clothing, girls’ clothing, and babies’ wear. Household drapery was moved to the miscellaneous group. Table 2 lists the men’s and women’s wear included in the 1949 CPI.

Table 2: Men’s and women’s wear in the 1949 CPI

The clothing group has continued to change since the 1940s – items have been removed and new items have been added. For the women’s clothing group, socks and cardigans were added in the mid-1950s. Slacks (now more commonly known as trousers) and swimsuits were added in the mid-1960s. Blouses were added in the late 1970s. The trousers category was expanded to include women’s jeans in 1980, and t-shirts and tracksuits were also added in the 1980s. The most recent additions include the introduction of belts in 2008 and summer skirts in 2011. Corsets were dropped in the mid-1960s, followed by girdles in 1980. Winter dresses were dropped in 1999 and summer dresses in 2002.

Changes have also occurred for men’s clothing – men’s jeans were added in the mid-1960s and belts were added in 2008, while men’s pyjamas were dropped in 2002.

Clothing in the current CPI

The current clothing subgroup in the CPI basket differentiates women’s clothes into those available in the summer season, in the winter season, and all year round. Women’s seasonal clothing items are further split into fashion items and others. Prices for winter items are collected in June quarters and prices for summer items are collected in December quarters. Table 3 lists the women’s and men’s clothing in the current CPI basket:

Table 3: Women’s and men’s clothing classes in the 2011 CPI basket

Price changes in clothing compared with overall CPI

Figure 1 shows how prices for women’s and men’s clothing and for the overall CPI have changed since the June 1986 quarter.

Figure 1

Since the late 1980s, the rate of price change for men’s clothing has been below the rate of price change for both women’s clothing and the CPI. Since the mid-1990s, the rate of price change for men’s and women’s clothing has been below the rate of price change for the CPI.

These price movements coincided with reductions in import tariffs for clothing and the removal of import quotas in 1992, which meant anyone could import clothing. In 1987 the import tariff for clothing had been 65 percent for some clothing items, and 40 percent for others(1). By 1991 the tariff had fallen to 40 percent for all items and by 1999 it was down to 19 percent Tariffs for clothing imported into New Zealand are currently at 10 percent for both men’s and women’s clothing (2).

Following the removal of import quotas and the phased reduction in import tariffs for clothing, there has been a large increase in the amount of clothes imported, especially from China – where production costs are relatively low. As a result, many New Zealand clothing factories have closed, with, in some cases, production being outsourced to Asia – where manufacturing costs are cheaper.

Figure 2

Figure 2 shows the volume of clothing and footwear imported to New Zealand has increased six-fold since 1989. In contrast, the number of New Zealand enterprises in the clothing and knitted product manufacturing industry has declined. From February 2000 to February 2011, the number fell nearly 25 percent – from 1,157 to 862. Further, the number of jobs filled by paid employees in the clothing and knitted product manufacturing industry fell nearly 60 percent – from 9,550 to 4,120. 

Available sales data also indicates the clothing manufacturing industry has contracted in recent years.  From the June 1993 quarter to the June 2012 quarter, sales from the textile, leather, clothing, and footwear industry decreased by about one-third, from $802 million to $523 million.

More recent price changes for clothing

Figure 3 shows the price movements for a selection of women’s clothing items that have either increased more, or decreased more, than women’s clothing overall. 

Figure 3

Over the past 12 years, the price of women’s hosiery has risen more than the overall price of women’s clothing, and generally in line with the CPI. Women’s sock prices have also risen relatively strongly, particularly over the past five years.

In contrast, the prices of women’s tracksuit trousers and jeans have fallen in the past 12 years, relative to both the CPI and the women’s clothing group.

Figure 4

 
Figure 4 shows that the price of men’s socks has increased more strongly over the past 12 years than the price of men’s clothes overall. In contrast, prices for men’s trousers and men’s tracksuit trousers have both fallen relative to men’s clothes overall and the CPI.

Movements in prices for men’s jeans have been in line with the price of men’s clothing overall. Up to 2006, the prices of men’s trousers, jeans, and tracksuit trousers moved in line with the price of men’s clothes overall. Since then, prices for men’s trousers and tracksuits have fallen more than the price of jeans.

Interestingly, over the past 12 years, the price of women’s jeans has fallen by more than one-fifth, while the price of men’s jeans has stayed about the same.

Summary

This article has provided a historical overview of the CPI clothing group. Since the 1920s, the items tracked for the clothing group have changed to reflect changing fashions and spending patterns.

We have seen that the rate of price change for the overall clothing group has tracked below the CPI over the past two decades. Evidence suggests that an influx of imported clothing, and tariff reductions from the late 1980s, have contributed to keeping overall clothing prices relatively flat.

We have also seen that within the CPI clothing group, the rate of price change has varied for different items. Since 2000, both women’s and men’s sock prices have risen relatively strongly, while tracksuit trousers prices have fallen.

References

Statistics New Zealand (2009). A comparison of household spending patterns based on the 1980 and 2008 CPI baskets. Available from www.stats.govt.nz

Ministry of Business, Innovation & Employment (2012). Tariff rates and concessions. Available from www.med.govt.nz  

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