NEW YORK — Shoppers looking to update their wardrobes may find their money won't stretch as far.
As the world economy recovers and demand for goods rises, a surge in raw material and labor costs is squeezing retailers and manufacturers who have run out of ways to pare expenses.
Clothing prices had dropped for a decade as tame inflation and cheap overseas labor helped hold down manufacturers' costs. During the recession, retailers and clothing makers cut frills and experimented with fabric blends to keep prices in check.
But cotton has more than doubled in price over the past year, hitting all-time highs. The price of synthetic fabrics has jumped roughly 50 percent as demand for alternatives has risen.
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Clothing prices are expected to rise about 10 percent in coming months, with the biggest increases in the second half of the year, said Burt Flickinger III president of Strategic Resource Group.
Brooks Brothers' wrinkle-free men's dress shirts now cost $88, up from $79.50. Levi Strauss & Co., Wrangler jeans maker VF Corp., J.C. Penney Co., Nike and designer shoe seller Steve Madden also plan increases.
More specifics on price increases are expected when clothing retailers such as J.C. Penney Co. and Abercrombie & Fitch Co. report financial results this month.
"All of our brands, every single brand, will take some price increases," said Eric Wiseman, chairman and CEO of VF Corp., which makes clothes for the North Face, Nautica, Wrangler and Lee brands. Cotton accounts for half the production cost of jeans, which make up about one-third of VF's sales, Wiseman told investors in November.
Higher costs also will affect how clothes are made. Clothing makers are using more synthetics like rayon and designing jeans with fewer beads and other embellishments. Shoppers also will have fewer color choices.
Retailers are trying to figure out whether the consumer demand that gave them strong holiday sales will last. The fear is that higher prices will nip it in the bud. Stores that cater to low- and middle-income shoppers will have the hardest time passing along price increases.
"We have been so used to deflation for years and years," said David Bassuk, managing director in the retail practice of AlixPartners. "Customers are going to be surprised."
Janice Mignanelli of Washington Township, N.J., doesn't want any surprises.
"'I'm not going to spend any more than $50 for a pair of jeans," said Mignanelli, a stay-at-home mom shopping at the Garden State Plaza in Paramus, N.J., last week. "I'll just have to cut back on the extras."
Even affluent shoppers, whose spending has rebounded, may bristle.
"It does give me some pause," said Jimmy Franco, a 47-year-old publicity executive and fan of Brooks Brothers' shirts. "Instead of buying two, I may just get one and a pair of socks. There's a certain amount of money that I'm prepared to spend."