Leather and shoe production statistics - NACE Rev. 1.1

From Statistics Explained

Data from January 2009. Most recent data: Further Eurostat information, Main tables and Database.

This article belongs to a set of statistical articles which analyse the structure, development and characteristics of the various economic activities in the European Union (EU). The present article covers leather and leather products manufacturing, corresponding to NACE Rev 1.1 Subsection DC, which is part of the textiles, clothing, leather and shoe production sector. The activities covered in this article include:

  • tanning and dressing;
  • the manufacture of luggage;
  • the manufacture of handbags;
  • the manufacture of footwear.
Table 1: Tanning and dressing of leather; manufacture of luggage, handbags, saddlery, harness and footwear (NACE Division 19). Structural profile, EU-27, 2006

Main statistical findings

Structural profile

Table 2: Tanning and dressing of leather; manufacture of luggage, handbags, saddlery, harness and footwear (NACE Division 19). Structural profile: ranking of top five Member States in terms of value added and persons employed, 2006
Table 3: Tanning and dressing of leather; manufacture of luggage, handbags, saddlery, harness and footwear (NACE Division 19). Expenditure, productivity and profitability, EU-27, 2006
Table 4: Tanning and dressing of leather; manufacture of luggage, handbags, saddlery, harness and footwear (NACE Division 19). Main indicators, 2006 (1).

Leather manufacturing (NACE Subsection DC) in the EU-27 was carried out as a main activity by about 44.0 thousand enterprises in 2006. These enterprises employed 548.8 thousand persons and generated EUR 11.9 billion of value added, representing 18.4 % of the total value added for textiles, clothing and leather manufacturing (NACE Subsections DB and DC).

The manufacture of footwear (NACE Group 19.3) was the largest activity within the leather manufacturing sector, accounting for about seven tenths (70.7 %) of employment and a smaller majority (58.2 %) of value added. The manufacture of luggage, handbags and the like (NACE Group 19.2) accounted for a further quarter (25.4 %) of the leather manufacturing sector’s value added in 2006, the rest (16.4 %) coming from the activity of tanning and dressing leather (NACE Group 19.1).

Almost one half (49.5 %) of all the value added generated by the EU-27's leather manufacturing sector came from Italy – this was its largest share of any EU-27 industrial (NACE Sections C to E) subsection. The EUR 5.9 billion of value added generated by the sector in Italy was the equivalent of 0.9 % of the value added generated across the non-financial business economy, about four and a half times the average contribution in the EU-27. In these relative terms, the only Member State that was more specialised in leather manufacturing was Romania, where the value added from leather manufacturing accounted for 1.1 % of non-financial business economy added value in 2005. Whereas Italy was relatively specialised in all activities within leather manufacturing, the focus of Romania’s specialisation was very much on footwear manufacturing.

There was a sharp downward trend in the production index of leather manufacturing in the EU-27 during the period between 1997 and 2007 (an average decline of 5.4 % per year). Between 2001 and 2005, the rate of decline was particularly strong (an average -8.5 % per year), mainly as a result of the steep falls noted for footwear manufacturing (an average -10.2 % per year during this period). Declines in footwear output continued in 2006 and 2007, although at about half the rate of the preceding four years. In 2006, there was a rebound in the output of tanning and dressing of leather, while the manufacture of luggage, handbags and the like recorded stable output in 2006 and strong growth in 2007.

Expenditure and productivity

Across the EU-27, tangible investment in the leather manufacturing sector was EUR 1.1 billion in 2006, by far the smallest share (14.4 %) of such investment across textiles, clothing and leather manufacturing as a whole. Indeed, when compared with the value added that the leather manufacturing sector generated, the corresponding investment rate of 8.9 % was among the very lowest across the NACE divisions that comprise industry and about one half of the rate recorded for the non-financial business economy. As with the clothing sector, this low investment rate may at least partly reflect a further shift in production to non-member countries.

The apparent labour productivity, average personnel costs and wage-adjusted labour productivity ratio of the leather manufacturing sector in the EU-27 were almost identical to those recorded for textiles, clothing and leather manufacturing as a whole but, as a result, were considerably less than the averages across the non-financial business economy. Only in France and Germany did the wage-adjusted labour productivity ratios of the leather manufacturing sector equal or slightly exceed the corresponding ratio for the non-financial business economy.

Average personnel costs in the EU-27’s footwear subsector of EUR 13.3 thousand per employee were particularly low, as was the average value added generated by each person employed (EUR 17.9 thousand). These figures were about one half of the corresponding averages recorded for the tanning and dressing of leather subsector. However, the wage adjusted labour productivity ratios of each were very similar and almost the same as that for textiles, clothing and leather manufacturing as a whole.

Data sources and availability

The main part of the analysis in this article is derived from structural business statistics (SBS), including core, business statistics which are disseminated regularly, as well as information compiled on a multi-yearly basis, and the latest results from development projects.

Context

Since the closure of the World Trade Organisation’s (WTO) ten-year, transitional Agreement on Textiles and Clothing (ATC) at the end of 2004, the European Union market for textiles, clothing, leather and footwear has been open to far more global competition, particularly from China and other Far Eastern countries. The European Commission published a study on the competitiveness, economic situation and location of production in the textiles and clothing, footwear, leather [and furniture] industries in 2007, which put forward some ideas for consideration: to upgrade knowledge and skills within the sector; to enhance the value added of EU manufactured products, perhaps through emphasising social ethics, environmental and health considerations and ethical sourcing; to enhance the protection of intellectual property; to foster trade and eliminate trade barriers; to improve the integration of fashion and design in the sector and better support young designers.

There are four key processes in leather manufacturing: hide and skin storage and beamhouse operations, such as sorting, trimming and curing; tannery operations, such as deliming and tanning; post-tanning operations, such as washing and neutralisation; and finishing operations with respect to gloss, handle and colour. There is now strong environmental legislation through these processes, whether concerning best available techniques (BAT) for the tanning of hides and skins, the restriction of various dangerous substances and preparations in the process, or waste water legislation. There are other key policies on trade that greatly impact upon the sector, such as access to raw hides and skins (bovine and ovine), market access, trade distortions and possible non-member country protectionism, which are of increasing concern in the current economic climate.

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