Leather Industry Is Difficult To Stabilize
Sep 26, 2022
A sudden COVID-19 epidemic spread around the world. China's economy has experienced many difficulties and setbacks, and the leather industry has also suffered an unprecedented impact. In the face of the severe and complex situation at home and abroad, the leather industry has actively responded to the challenges, steadily promoted the resumption of work and production, and worked hard to resolve the risk impact brought by the epidemic by relying on the advantages of a sound industrial chain and a rapid response supply chain. the decline of the main operating indicators continues to narrow, and the economic operation situation picks up steadily.
The boom index bottomed out and rebounded. According to the medium and light leather climate index jointly released by the China Leather Association and the China Federation of Light Industry, in 2020, affected by the outbreak of COVID-19, the medium and light leather climate index fell to the bottom in February, breaking the range of overcooling. However, it has continued to pick up month by month since then, rising to 73.1 in December, indicating that the operation of the industry is gradually improving and business confidence has recovered steadily.
Exports fell in double digits for the first time, and the United States once again leapt to the largest export market. For the whole of 2020, the export value of the leather industry reached 68.07 billion US dollars, down 21.6 percent from the same period last year. After three years of restorative growth from 2017 to 2019, industry exports were hit hard in 2020 because of the impact of the COVID-19 epidemic on the international market, the first double-digit decline in leather industry exports in nearly 30 years.
From the perspective of export markets, the United States, the European Union, ASEAN, Africa and Japan are the top five target markets for industry exports. Under the condition of low performance in traditional markets, exports to "Belt and Road Initiative" countries still maintain a good momentum, and the proportion of leather industry exports to "Belt and Road Initiative" countries in the total exports continues to expand.
The recovery of the domestic demand market has led to imports, and imports from the European Union have performed well. In the second half of 2020, with the effective control of the epidemic situation in China, the orderly recovery of economic life, and the quarterly improvement of domestic market sales in the leather industry, supporting the demand for leather import products, the import decline gradually narrowed after August.
The imports of China's leather products are mainly products, accounting for 69.7% of the total imports in 2020, an increase of 9.8 percentage points over 2019, higher than the imports of raw materials and equipment for five consecutive years, and the gap is widening day by day, indicating that the trend of consumption-driven imports is becoming clearer, and consumers' demand for middle and high-end products of imported products is becoming more and more obvious.
The European Union and ASEAN are the two main sources of imports for China's leather industry, with imports of US $6.03 billion and US $5.28 billion respectively, accounting for 74.3%, up 13.6% and 3.3% respectively over the same period last year. This is mainly due to the gradual recovery of China's domestic demand market after the second quarter, supporting strong demand for mid-and high-end shoes and bags from the European Union.
In 2021, with the extensive development of global COVID-19 vaccination, the global economic development environment has improved, but it will take time to completely control the epidemic, especially in the first half of the year. Based on the cumulative effects of factors such as the global market downturn and the increased risk of trade friction, the leather industry is still facing great development pressure in the international market. From a domestic point of view, China's leather industry has entered a period of deep adjustment, the pressure of environmental protection, comprehensive costs, the impact of alternative materials and other challenges are still the same, to maintain a smooth operation is facing many tests. At the macro-economic level, the "double cycle" new development pattern, which is mainly based on the domestic cycle, as well as a strong and diversified domestic demand market will become the core engine for the sustained recovery of the industry. Considering that the industry has shown a trend of recovery, and the base of industry sales, output and exports is low in 2020, it is expected that the main economic indicators of the leather industry will show restorative growth in 2021.
