Despite a 47.9 percent year-on-year surge in output in the month of March, Italian footwear production fell by 6.4 percent in the first quarter compared with the previous year as the industry continued to be affected by the impact of the Covid-19 pandemic. The decline reached 29.9 percent when compared with the first quarter of 2019, according to data from the Italian statistics office Istat released by the footwear association Assocalzaturifici.

In a survey carried out in April among Assocalzaturifici’s member by Confindustria Moda’s research center, only 22 percent of respondents experienced higher or stable revenues in the first quarter. Fifteen percent suffered a decline of up to 10 percent, 24 percent a drop of 10-20 percent, 16 percent a slump of 20-35 percent and the remaining 23 percent a fall of over 35 percent. On average, revenues are estimated to have dropped by 14.0 percent year-over-year.

The survey indicated that in the opening quarter of 2021, 23 percent of respondents registered higher or stable orders. The rest faced declining orders, with 29 percent booking a more than 35 percent drop. On average orders are estimated to have retreated by 11.7 percent.

However, half the panel witnessed green shots in foreign markets, with Germany and France being the two countries most cited for signs of recovery, followed by the U.S., China, Russia and Belgium. The bulk of the respondents, 73 percent, expect the recovery to be in full swing between the autumn of 2021 and spring of 2022. Over half, 55 percent, expect their client base to return to pre-Covid levels in 2022, but 20 percent believe this will only occur in 2023 and 19 percent do not anticipate a return to pre-Covid levels.

To mitigate the impact of the crisis, 66 percent of companies cut costs, 63 percent developed online sales and 58 percent expanded into new markets. Despite government imposed restrictions on layoffs, 51 percent were expecting to end the first half of 2021 with less staff than at the start of the year.

In the first quarter, the overall employee headcount in the footwear industry decreased by 0.3 percent, or 238 people, to 71,644. Meanwhile, the number of companies was down by 1.3 percent, or 55 units, to 4,097.

When widening the panel to include component producers, the number of companies that have shut down reaches 123 and the number of job losses totals 587.

The survey also showed that 85 percent of respondents faced higher costs for raw materials, with 42 percent of panel complaining about a “strong” increase in prices.

Domestic consumption falls, exports rise

In the first quarter, Italian household spending on footwear fell by 3.5 percent year-over-year in volume to 25.2 million pairs and by 6.9 percent in value to €979.9 million, as the average price of shoes dropped by 3.5 percent to €38.82. When compared with the first quarter of 2019, spending plummeted by 21.5 percent in volume and by 26.0 percent in value.

The only categories to grow between 2021 and 2020 were sports shoes and sneakers along with women’s slippers.

Exports rose by 3.0 percent in value to €2.488 billion and by 0.3 percent in volume to 52.3 million pairs. The average price per exported pair was €47.32, up by 2.7 percent. Exports to the European Union represented nearly 48 percent of the total value.

Switzerland was the single largest export market, up by 12.2 percent to €456.8 million in value and by 13.2 percent in volume to 4.2 million pairs. The country acts as a logistics hub for many fashion brands. France ranked second, up by 6.9 percent to €394.0 million, and by 7.9 percent in volume to 9.4 million pairs, as many Italian shoe makers supply French brands. France was the largest foreign market in volume. Germany was third, up by 4.9 percent to €273.3 million but down by 0.8 percent in volume to 8.8 million pairs.

Exports to China surged by 74.8 percent in value to €91.4 million and by 44.4 percent in volume to 597,000 pairs and were above pre-Covid levels. The data was underpinned by direct exports to mainland China, resulting in an 11.4 percent drop in export volumes to Hong Kong, and a focus on higher priced goods. The average price of exports was €153.05 per pair, up by 21.0 percent.

Overall, Italian imports fell by 3.1 percent in the first quarter to €1.354 billion. In volume, shipments fell by 11.7 percent to 88.0 million pairs while the average import price per pair was €15.38, up by 9.8 percent.

Italian imports from China were down by 7.6 percent in value to €268.0 million, followed by France, up by 15.2 percent to €155.4 million, and Belgium, down by 9.1 percent to €115.6 million. In volume, China was by far the largest footwear supplier, with 39.3 million pairs imported from the Asian powerhouse, down by 17.5 percent.

In the period, Italy’s overall trade surplus in footwear increased by 11.2 percent year-on-year to €1.019 billion.