The foreign clients of Italian shoemakers are buying more and more expensive models from them, judging from the latest data publishing by ANCI, the Italian shoe industry association, which continue to show negative trends for national production and exports. In fact, while the volume of Italian shoes sold abroad fell by 14.4 percent to 118 million pairs in the first five months of this year, their average price increased by 11.7 percent to €21 per pair.

It’s a trend that is likely to persist. According to ANCI’s president, Rossano Soldini, many Italian shoe manufacturers are dropping out of certain low and medium-priced types of production where they have no chance to compete with China after the dismantling of the European import quotas. On the other hand, many small Italian companies are telling us that they are still doing good business with foreign customers because of their flexibility in taking on small orders for quick delivery. Many bigger ones admit that they are getting their footwear manufactured increasingly in other low-cost countries, including China.

All the major product categories recorded declines in the pairage exported during the first five months of 2005. However, while Italian exports of leather shoes dropped by 8.9 percent in volume, those of other cheaper products fell even more steeply. The rate of decline reached 23 percent for slippers, 32 percent for rubber shoes and 40 percent for canvas shoes.

Geographically, sales to the other 24 member countries of the European Union declined by 13.2 percent in volume, including drops of 15.2 percent in Germany and 12.2 percent in France. Deliveries to other West European countries dropped by 2.4 percent, and the Middle East was down by 9.4 percent. With the low dollar, exports to North America plunged down by 27.3 percent, while Latin America was down by 74.5 percent overall. Instead, exports to Russia and other countries in Eastern Europe and the Community of Independent States (former Soviet Union) inched up by 3.3 percent (many are still not declared). Sales in the Far East went up by 8.5 percent, driven by Japan and South Korea. There was an increase also in China, but the new total for the five months was still only 111,000 pairs.

According to ANCI’s surveys, Italy’s footwear production fell by a further 9.7 percent in volume and by 8.4 percent in value during the 1st half of 2005. One of the results was the loss of 5,350 jobs in the whole value chain, including 2,800 jobs in the footwear sector and the others in materials and components. It’s a big acceleration from the losses recorded in 2004, when shoe companies dismissed 2,800 people and the related industries another 4,600.

More than 600 companies throughout the value chain closed down in the first six months of the year. At the same time, the number of temporary layoffs subsidized by the Italian government grew by 3.3 percent, after a 34.9 percent increase in 2004. However, big new increases were recorded in the Marche region (+36%) and in Lombardy (+30%).

Italy continues to be the biggest shoe producer in Europe, followed by Spain and Portugal. On a European-wide basis, footwear production declined by only 2.5 percent during the first few months of 2005, and the number of companies dropped by about 2 percent.

The Italian leather industry is doing marginally better, thanks in part to diversification and to a better performance in the leathergoods, furniture and automotive sectors. Its total sales declined by only 6.2 percent to €5,014 million in 2004, but its exports remained nearly steady. Sales of footwear components dropped by 4.4 percent to €1,724 million in the past year. Exports of components fell by 3.0 percent in 2004 and by a further 8.7 percent in the first three months of 2005.

While Italian footwear consumption remained relatively flat, with a 0.1 percent decrease in volume, imports continued to increase sharply, but much less than the Eurostat statistics published last June would lead to believe. Total shoe imports grew by 17 percent to 153 million pairs during the first five months of 2005. In particular, imports from China grew by only 6.3 percent in volume, while those from Vietnam were almost stable and those from other Asia countries like India and Indonesia were down.

However, imports of leather shoes from China increased by 300 percent, with a jump of 300 percent for walking shoes and 913 percent for sandals, leading to an overall 54 percent increase in the value of all the shoes imported from China. Their average price is still low at €2.90.

Imports of leather shoes from all sources increased by only 7.8 percent. Synthetic and canvas shoes declined. Rubber shoes were up by 38 percent and slippers increased by 3.3 percent.

On the other hand, many Chinese and Vietnamese shoes enter Italy through Belgium or Holland. Imports from these two countries increased by 59 and 25 percent, respectively.