Exports stand the strain, exceeding 6.2 billion Euro (+2.2%) between January and August: EU markets are stable; Russia’s resurgence continues; the Far East stalls. Internal consumption remains weak. Pilotti: “The year closes with signs of stability. Recovery still seems far off, however.”
A climate characterised by stability and caution on the part of market participants. This is the snapshot of the Italian shoe industry that emerges from the most recent survey by Assocalzaturifici regarding the first nine months of 2017. The sector continues to show moderately positive signs according to all the main indicators – starting with production, which grew on average 0.7% in volume and 2.1% in value in the sampled companies – but a real upswing still has not come about, particularly following a third trimester distinguished by mostly stable activity levels, a slow-down in exports, and internal consumption once again at a standstill.
“We are approaching the close of a year which has, after a long and unsatisfying period, finally started to show some tentative signs of a turn in the cycle. However, we cannot let ourselves fall prey to facile enthusiasm. The recovery, which can already be seen in other national production sectors, has not yet reached us and even if the comforting signs that have emerged from our data would seem to indicate that the path we are heading down is the right one, there are still many businesses which are in trouble”, declares Annarita Pilotti, President of Assocalzaturifici.
Buoying the sector, once again, are exports which – according to the official ISTAT (the Italian National Statistical Office) figures, which are only available for the first eight months of the year – are showing increases of 2.2% in value and 1.4% in volume, as compared to the same period in 2016. Amongst the EU markets (+1% in value and +0.2% in volume, overall), France’s gentle recovery continues (+0.8% in quantity), but Germany continues to shrink, declining by 2.9% (despite an overall increase of +0.6 in value).
Outside of the European community’s borders, instead, (+4.4% in quantity and +3.6% in value, globally) Russia’s recovery gives reason to be hopeful (+28.3% in volume and +18.4% in value) as it continues to gather speed (unlike Ukraine and Kazakhstan which have, respectively, achieved only a very modest +0.9% and -0.4% in quantity).
Demand in the USA has improved, if only in volume – where increases over 6% have been reported – whereas there has been a fall in Canada (-5.4% in volume). This is, however, a phenomenon that predates the CETA agreement entering into force, which happened in September.
Sales have been progressively improving in the Middle East (+3.2% in quantity), but the Far East continues to see a slow-down (-6.8% in volume and -4% in value as a whole). This is due to the increases seen in South Korea (+7.6% in quantity) and China (+5.5%, despite a -1.7% in value) not being enough to compensate for the negative trends in Japan and Hong Kong, which have both seen decreases close to 12% in volume.
2017 was a year also characterised by a cool-down in export prices. Following the growth seen in previous years (an increase of over 32% between 2011 and 2016), in the first eight months of the year, on average, a weak +0.8% was recorded, with a non-negligible contraction in Russia (equal to -7.8%) and downwards or, at best, conservative trends seen in many other major markets (both European and non-European).
Thanks to the stabilisation of exports and the simultaneous slow-down in imports (down by -1.6% in value and 3.3% in volume, with a partial recovery in the summer bimester), the commercial balance came into the black in the first eight months of the year reaching 2.97 billion Euros (+6.8%), once again confirming the positive contribution that the shoe industry brings to the national commercial balance.
However, the dynamics of Italian families’ consumption are extremely weak. In the first nine months of 2017 they report a +0.4% in value and -0.3% in quantity, compared with an increase in the average price equal to 0.7%. The only rising sector is “sport shoes and sneakers”, where an increase in spending of just above 4% has been seen (with a +3.3 in volume).
Finally, the data still tell a story of ups and downs when looking at the employment-related and demographic elements of the industry’s businesses: the number of shoe factories active in 2017 shows a decrease of 99 units (-2%) as compared to December 2016. Whereas the number of employees has increased by 279 as compared with the 2016 financial statement, equal to an increase of +0.4%, even if the third trimester saw a break in the recovery seen in the first two periods.
A downwards trend is also present in wage subsidy usage in the leather sector, which is linked, however, to the stricter selection criteria introduced by the legislative decree reforming measures to cushion the effects of unemployment that are being used for awarding concessions to companies. The total from the first nine months of the year shows a decrease of -39%, with a fall of 10% for ordinary CIG usage (Cassa Integrazione Guadagni – Wage Support Fund) and of over 50% for the extraordinary instrument usage.
Press release
Assocalzaturifici
Milan, XX December 2017