Italy: Values up, volumes down

First quarter of 2023: Turnover (+13.6%) - Exports in value terms (+16.1%) - Export volumes (-2%) - Production (-1%)

Milan, Italy (10 July 2023) – The first quarter of 2023 saw the recovery of the Italian footwear sector continue, with turnover up +13.6% compared to the same period in the previous year. This is the snapshot provided by the Confindustria Moda Research Centre for Assocalzaturifici, which also shows an improvement in the balance of trade (+21%).

This was after record exports in 2022 (12.65 billion euro, +23% over 2021).

The growth in exports continued, with a further +16.1% increase in value. All top 20 destinations for Italian footwear, except for Switzerland (-7.8%), saw increases in value, that were almost always in double-digit territory.

However, the situation is different for volumes, as North America slowed down noticeably (-19.4%) and decreases were seen in Germany (-8.8%), the United Kingdom (-10.1%) and in direct flows to Switzerland (-24.8%), the traditional logistics hub for luxury brands.

There was a strong recovery in Russia and Ukraine, although it should be noted that in March last year, immediately after the start of the conflict, sales to these two markets had plummeted; the results for Kazakhstan (+77% in value) were very positive.

The recovery in the domestic market also continued (+8.2% in household purchases over Q1 2022).

However, despite the favourable trends for the main economic variables, there is still cause for concern.

The survey conducted by the Confindustria Moda Research Centre amongst our members revealed that high prices for energy and raw materials are currently the biggest problem for footwear companies, due to their impact on balance sheets.

The survey responses also confirmed the tightening of banking credit in recent months.

Finally, the analysis confirmed the sector’s difficulties in finding skilled labour - with 84% of entrepreneurs identifying this as a significant problem for their businesses.

Returning to exports, the leather uppers footwear segment - the leading segment, which accounts for 63% of the value of exports - is the only one to have increased in the first quarter both in value terms (slightly above the average, +18.6%) and volume (+1.4%) compared to the same period in 2022; nevertheless, volumes are still down markedly compared to 2019 (-16.6%). Among the segment's items, there was a significant reduction for children's leather footwear (-12% in volume), bringing to an end the recovery over the last 2 years; there were positive signs for men's (+4.7% in total volume, despite the decrease in high boots) and women's segments (+1.5% in volume, with +2.2% and +4.2% increases for walking shoes and sandals respectively and a -24.5% reduction for boots/ankle boots).