The order backlog of Italian shoemakers is being hit by a weak domestic demand. Europe's sovereign debt crisis and a slowdown of the global economy indicate that the next three years could be challenging and that the Italian footwear industry may not repeat the results achieved in 2011, said Cleto Sagripanti, chairman of the footwear association Anci.

An Anci survey showed that in, the first four months of 2012, orders from domestic clients dropped by 7.6 percent, while orders from abroad rose by 0.5 percent largely thanks to countries outside the European Union. The trend is expected to continue in the medium term.

In the first two months of 2012, exports in value rose by 5.8 percent, thanks to the industry's ability to position itself in higher-value products, while exports declined by 7.6 percent in volume. Sales declined in nearly all the countries of the EU and in Africa. Sagripanti said that the data show that the industry is competitive but that companies have to cover increasingly distant markets, and for this reason need more support than in the past.

In the two-month period, sales to Western European markets fell by 1.5 percent in value and 11.3 percent in volume, while exports to the U.S. rose by 15.8 percent in value, and surged by 14.5 percent to Russia, by 16.1 percent to Ukraine and by 30.4 percent to the Far East. Overall, Italian shoe exports rose by 5.8 percent in value and dropped by 7.6 percent in volume.

Italian footwear companies interviewed by Anci indicated Russia, Japan and the U.S. as the most promising markets. Sagripanti believes that Italian shoemakers can increases sales by 60 percent in Russia in the coming years even if they already control about 20 percent of the local market.

According to data released by Anci, Italy manufactured 207.6 million shoes in 2011. Production rose by 2.6 percent in volume and by 6.7 percent in value. Italian was the largest footwear manufacturer in the EU, churning out 33.1 percent of the region's production. The number of companies dropped by 3.4 percent last year to 5,606 but employment rose by 1.0 percent to 80,925. However, employment declined in the first two months of 2012, erasing the gain posted last year.

Last year, domestic sales were weak as households reduced their purchases by 2.0 percent. The contraction mainly hit specialty stores, where the drop reached 4.5 percent. The industry had to rely on exports to boost sales. In 2011, exports rose by 12.7 percent in value to more than €7.4 billion and by 3.4 percent in volume to 229.0 million pairs, including re-exports. However, in the last quarter exports slumped by 7.0 percent in volume.

The Italian industry managed to recover the level of exports achieved before the global recession in 2009, when the global economy shrank by 2.3 percent according to the World Bank. Last year's exports are 7.8 percent higher in value and 3.2 percent higher in volumes compared with 2008. The only markets where Italy has not recovered 2008 levels in terms of value and volume are Eastern Europe and the Commonwealth of Independent States. North America exports have returned to 2008 levels in value but not in volume.

Exports to the top three foreign markets were all positive. In value, exports were up by 10.8 percent to France, by 7.8 percent for Germany and by 14.7 percent for the U.S. In volume, export growth was much more moderate, with France up by 0.6 percent, Germany by 0.7 percent and the U.S. by 3.7 percent.

Among other leading foreign markets, exports in value to Russia rose by 20.7 percent, by 20.3 percent to Japan, by 48.4 percent to Hong Kong and by 88.0 percent to China. China and Hong Kong together represent Italy's seventh-largest export market.

The industry's trade surplus rose by 16.4 percent in 2011, in the wake of a 10.5 percent gain in 2010.