Their appeal transcends income, education and taste. While other fashions have come and gone, the lowly T-shirt keeps selling. But even this garment's sales may be vulnerable to a recession. Indeed, a surge in domestic capacity and the flow of imports have made T-shirt marketing a sweaty contact sport. Analysts are expecting cutbacks in domestic T-shirt output to continue in 1991.

"The T-shirt market this year is soft due to too much capacity and the erosion in general economic conditions," said Robert Blanchard, president of the National Knitwear Manufacturers Association, of Morristown, N.J. "Retailers knew that they can always get the supply they need and are controlling their inventories."

Because T-shirts are relatively cheap and readily available in a wide range of styles and designs, they appeal to many different people. For example, wearing a T-shirt is a way to assert one's identity or or back up a boast, whether it be about surviving the New York Marathon, visiting Dolly Parton's Dollywood in Tennessee or proclaiming an allegiance to Calvin Klein. "Over the last five years, demand for T-shirts has been very strong," said Deborah Bronston, apparel analyst for Prudential-Bache Securities Inc., in New York City.

Meeting the demand can yield stunning profit margins. Start with a simple white cotton or cotton-polyester shirt, dye it in the factory or run it through a screen or thermal printing machine. With little added expense, a basic $3-wholesale shirt can emerge as a garment that sells for several times more.

This year, about a billion T-shirts have been made for the United States market, or four for every back. Domestic mills produced about 609 million outerwear-style T- shirts and produced another 300 million meant to be worn as underwear. About 108 million shirts have been imported.

T-shirts are the only clothing sold not just in stores, but also on the street, in gasoline stations, bowling alleys, movie theaters and zoos. A single shirt can fetch as little as $5 or as much as $150 when sold in boutiques. Even better, in Manhattan's Times Square, three shirts can sell for as low as $10.

Large makers like Fruit of the Loom Inc. and the Hanes division of Sara Lee Corporation, together account for more than 50 percent of the domestic outerwear T-shirt market, with Fruit of the Loom having a somewhat higher share than Hanes. But retailers buy only about 15 percent of their shirts directly from the manufacturers. The rest filter through wholesalers who either print T-shirts themselves or sell to independent, entrepreneurial style printers.

Some executives and analysts forecast continuing strong sales. Millions of young and older Americans constantly add to their T-shirt wardrobes -- attesting to the enduring American passion for the casual. "T-shirts and jeans naturally go together, since each seems to be just right for the other," observed Richard Ruster, the president of the Tee Corporation of America, a producer and importer in New York City. "They're the leisure wear for the 1990's."

Few fashions are so adaptable. What began as outerwear for the fitness craze has become an all-purpose garment for the home and many work places. Indeed, the greatest growth in T-shirt sales has been in outerwear. Jack Hershlag, executive director of the National Association of Men's Sportswear Buyers, speaks of "the two worlds of T-shirts."

One, he said, is the world of fashion T-shirts, proprietary creations marketed by companies or designers, usually as part of coordinated wardrobes. The other includes the blank shirts that are printed with cartoon characters, team names, product logos, special events, political slogans and jokes. "Bart Simpson is probably outselling any other cartoon character," Mr. Hershlag said. "It's a case of the product creating its own market, and the more bright ideas there are, the bigger the market will be."

Some analysts say that fashion and novelty will continue to fill T-shirts and T-shirt demand. "Even though some see an oversupply, I see a continuing, solid trend because of the tie-ins with popular movies or television shows," said Arthur Britten, a New York retailing and apparel consultant. "The 'Dick Tracy' and now 'The Simpsons' shirts have had sales in the millions."