Industry

Footwear, the industry is down by 9%. Italians' consumption also declines

Exports, which channel 85% of production, fell by 15% to non-EU countries in the first half of the year. The number of companies fell by 3%, and the number of hours authorised for redundancy payments more than doubled. 75% of entrepreneurs expect a year worse than 2023

by Fashion Editor

13 September 2024

3' min read

The national footwear sector ended the first half of the year with a drop in both turnover (-9.1%) and exports (down -8.5% in value and -6.8% in quantity in the first five months). The ISTAT index of industrial production also fell sharply (-19.5%). This is the picture of the sector taken by the latest report produced by the Centro Studi Confindustria Accessori Moda for Assocalzaturifici, which also notes a decrease in purchases by Italian families (-2.1% in both volume and expenditure).

The weak phase in demand, slowed down by a lower propensity to purchase on the part of consumers, the slowdown in several economies (not just China), and the uncertainty linked to geopolitical turbulence in various areas of the planet, has strongly penalised orders, not even sparing luxury goods," says Giovanna Ceolini, president of Assocalzaturifici. The negative economic situation is having strong repercussions on the production rhythms of companies, which have amplified recourse to the redundancy fund. Negative balances are also growing in the number of employees and active companies compared to last December'.

The most significant effects were seen in foreign trade: 'What suffered first and foremost,' continues Ceolini, 'were exports, which have always been the sector's driving force, given that 85% of the pairs produced in Italy are sold outside national borders. As a result of the contraction in foreign sales (-8.5%), the sector's trade balance, although in the black by Euro 2.34 billion, shows a drop of -4.7%, despite the downsizing of imports (-11.6%)".

Examining the export data in detail, the slight drops in sales to EU partners (-1.6% in value and -2.4% in quantity, favoured by the resilience of flows to France, +2.6% in value and +1.5% in volume, confirmed as the leading destination) are accompanied by setbacks in the order of -15% in non-EU outlets. Among these, the only positive signs are recorded for the Middle East (+10.7% in value) and the Far East (+2.9%, with China +12.6% and Hong Kong +22.6%), but these are to be read above all in the light of changes in the distribution strategies of luxury brands, particularly rooted in these areas, which now ship goods directly to their final destination markets that used to transit through hubs in Switzerland (which not by chance marks a -54.7% in value). The United States lost -3.5% in value (but a decidedly more marked -14.7% in volume), while Russia, after a slump in 2022 at the start of the conflict and a rebound in 2023, showed a -21.7% drop in value over January-May 2023.

On the domestic consumption front, the data is also not positive: in the first six months, purchases by Italian families fell by -2.1%, both in volume and in expenditure. Analysing the type of footwear, the most marked decreases concerned men's shoes (-5.7% in quantity and -4.6% in expenditure), while women's and children's/youth shoes showed reductions in the order of -3%, both in pairs and in value. Sportswear and trainers show the least heavy contractions (-1% in volume and -0.6% in value). Slippers, finally, dropped 1.7% in quantity (despite the fact that women's slippers held up), with -0.7% in expenditure.

While household purchases show little rewarding development, good news again comes from the shopping of foreigners visiting Italy, thanks to the increase in arrivals and presences of foreign tourists in the Belpaese, after the sustained growth of 2023.

On the labour front, the prolonged economic downturn is severely testing the resilience of companies, which are forced to make massive use of wage supplementation tools. In fact, in the leather sector, the number of hours authorised increased by +138.5% in the first 6 months, and is at levels 4.5 times higher than the same period in 2019 pre-Covid. In addition, the selection process among companies tightened, with inevitable repercussions on employment trends. At the end of June, compared to December, there were 107 fewer shoe factories, between industry and handicrafts (-3%), with a negative balance of -2,359 employees (-3.2%): a sudden turnaround, therefore, compared to the timid recovery recorded by the sector's workforce at the end of 2023 over 2022 (+1.8%).

As far as sentiment is concerned, operators' expectations for the second half of the year rule out major improvements in the short term. From the survey conducted among member companies, it emerges that the share of those who expect turnover to fall in the current third quarter compared to the same months of 2023 is still a majority (56% of the panel). And, with regard to forecasts for the whole year, 3 out of 4 entrepreneurs believe that 2024 will be worse for their company than the previous year.