Cut and Sew Apparel Contractors — Business Survival Rate
An estimated 40% of cut and sew apparel contractors businesses survive their first 5 years, based on U.S. Census Bureau Business Dynamics Statistics. The annual business closure rate is 16.8%.
Is Cut and Sew Apparel a Good Business to Start?
With a 40% five-year survival rate, cut and sew apparel contractors has a below-average survival rate compared to the national average of ~50%. This indicates higher risk of failure — new entrants face significant competitive pressure or challenging economics.
The annual exit rate of 16.8% is elevated. If you're considering entering this industry, ensure adequate capitalization, a clear competitive advantage, and realistic timeline to profitability.
Entry vs. Exit Rates
Annual rate of new businesses opening versus existing businesses closing.
Net negative: more businesses closing than opening (-6.3 pp spread).
Job Creation & Destruction
The industry is losing jobs faster than creating them — which may indicate automation, consolidation, or declining demand. Total employment: 48,796 workers across 3,332 firms.
Want to know how much cut and sew apparel contractors businesses actually make?
See full revenue benchmarks for Cut and Sew Apparel Contractors →Frequently Asked Questions
- What percentage of cut and sew apparel contractors businesses fail?
- Approximately 60% of cut and sew apparel contractors businesses fail within their first 5 years. The annual closure rate is 16.8%, with 544 firms closing permanently in 2023.
- Is the cut and sew apparel contractors industry growing or shrinking?
- The cut and sew apparel contractors industry is currently shrinking with a net job creation rate of -7.1% per year. New businesses are entering at 10.4% while 16.8% close annually.
Source: U.S. Census Bureau, Business Dynamics Statistics (2023). Survival rate estimated from annual exit rates.