In the first 8 months of the year foreign sales increased in value terms (+3.7%), but in the third quarter there was a slowdown in production (-5% in quantity). Exports outside the EU increased, particularly to China and South Korea (+20% and +11% respectively). More reductions in Russia. Domestic consumption remains weak.
The economic situation in the footwear industry was no exception, and following the trend in many other industrial sectors, there was a slowdown in the second half of the year. This was demonstrated by the results of the sample survey conducted by the Confindustria Moda Research Centre on behalf of Assocalzaturifici: national production fell by -2.4% in volume in the first 9 months, with a -5% drop in the third quarter alone.
It was therefore a lacklustre snapshot, with the domestic market showing no signs of a recovery and foreign demand slackening, especially in terms of volumes.
Nevertheless, the Italian footwear industry was once again driven by exports. According to the official ISTAT figures, in the first 8 months of 2018, Italian exports increased by 3.7% in value compared to the same period in 2017. Between January and August 143.6 million pairs of shoes (down -3.1%) were sold abroad but the combined value was just below 6.5 billion euro: a record for the period in absolute terms and a significant contribution to the balance of trade for the sector, which despite falling slightly, was 2.9 billion euro for the first 8 months of the year.
“These figures confirm the excellence of Italian manufacturing in the high-end segment”, states Annarita Pilotti, chair of Assocalzaturifici. “While, on the one hand, exports increased 2.7% in value terms to EU countries (which account for 7 out of every 10 pairs of shoes produced in Italy), non-EU sales fared even better, with increases of 4.7% in value and 3.6% in quantity, thanks especially to exports to China, that were up more than 20% in both volume and value. However, there are still issues in various destination markets”.
Although there were improvements in value terms, there was a 6% overall reduction in volume to EU markets: Germany was stable and confirmed its status as the leading market in terms of volumes (+0.2%, with +2.4% in value); there were reductions in France, Spain and Netherlands (8.7%, 9.8% and 13.9% in quantity respectively) and there was a slight reduction in the United Kingdom (- 1.1%, but with a +5.8% in value).
Outside the EU, Switzerland increased +15% in volume; there were positive signs from the Far East (+3.6% overall), thanks especially to the performance of China (which was up more than 20%) and South Korea (+11%), that offset negative trends in Hong Kong and Japan (-7% and -3.9% respectively).
North America was also positive: in the US there was a 4.5% increase in volume and in Canada, thanks to the provisional entry into force of the CETA, there was a more pronounced increase of +23.4%, which shows that free trade agreements work well for Italian light industry.
On the flip side, Russia’s new slowdown is a source of concern: after the initial recovery in 2017, in the first 8 months of 2018 there was a -11.3% slump in volume, with a further deterioration compared to the first half of the year, which stood at -9.6%.
“Unfortunately, the current levels for this area are almost 50% down in value compared to the same period in 2013, before the crisis – stresses Ms Pilotti – and this explains the major difficulties being faced by companies in districts that have always focused on the Russian market and, more generally, the CIS area”.
No recovery in the Middle East either (-7.6% in volume overall), where the UAE continued to struggle (-1.5%) and Saudi Arabia stood out for its negative performance, with a drop of 14.7%.
Moreover, in the first nine months of 2018, the trend for household consumption in Italy was very weak, with -0.8% in quantity and -0.9% in expenditure and price sensitivity still high (-0.1%). The only segment that improved was “sports shoes and sneakers”, which increased by 3.6% in volume and 1.5% in value.
Finally, there was still a mixed picture from the employment and company demographics data: the number of footwear manufacturers in business at the end of September 2018 fell by 2.5% compared to the final figures for 2017 (- 120) and the negative trend was also confirmed in employment levels (-314 units compared to the start of the year, -0.4%).
Nota Stampa
Assocalzaturifici
Milan, 19 December 2018