recession
Just like any other industry, leather industry is also going to face the gruesome effects of global recession. The recession is likely to be more pronounced in the small industries sector. The leather export orders from the primary western markets, especially US and UK markets have declined tremendously. Because of the low orders from the West and the fall in the business volume, the Chinese market is also aggressively pursuing its business forward with the help of its government.
Before the recession, leather goods were sold in large number in the big malls in US and UK. The number of sales has gone down tremendously during the recession period. And this has started to worry traders in the Indian market because they used to export 50% of the leather goods to US and UK markets. Exports of leather and leather products during 2007 and 2008 were at $3.47 billion, out of which $1.47 billion (42.44%) was from the export of leather footwear and components. Export of Leather goods accounted for $785 million (22.57%). These sectors would definitely be the most affected by the ongoing economic crisis in western markets.
Indian Finished Leather Manufacturers and Exporters Association’s chairman remarked that small industries had been working to only 40-50 per cent of their total capacity in the last two months, and this might go down to 30-40 per cent in the coming months. Obviously this is going to have direct impact on the product sector and the result will be drop in value and volume to about 15-20 % drop in the next six months. But there is also good news that the recession had not made much impact on the leather garment sector.
Please visit: http://en.wikipedia.org/wiki/Global_recession for more information on Global Recission.
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