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Germany industry is cautiously optimistic

Mar 18, 2019 Germany
Germany industry is cautiously optimistic
Manfred Junkert, Managing Director of the Federal Association of the German Footwear and Leather Goods Industry, spoke about the drop in foreign business in 2018 and the industry's cautious optimism for the future
Speaking at a press conference held on the 11th of March during the most recent edition of the Gallery Shoes, Manfred Junkert, stated that sales of German footwear manufacturers (with at least 50 employees) increased in 2018 compared to 2017, going from 2.94 to 2.96 billion euros. This corresponds to a slight increase in sales revenue of 0.7%. Contrary to general expectations, domestic business ensured slightly positive sales figures. With 2.4 billion euros, domestic sales were 3.2% higher than in the previous year. However, significant sales declines were recorded in the foreign markets. Overall, foreign sales decreased by 9.5% to 526.5 million euros, caused by the considerably lower sales revenues in the Euro Zone countries (decrease of 12.7% in the year).

Producer prices increased in 2018 compared to 2017: while there was a 2.5% increase in the producer prices for safety shoes, a 2.0% increase in the producer prices of shoes with leather uppers was observed. A producer price increase was also recorded for leather goods (+1.1%), textiles (+0.9%) and clothes (0.8%). Overall, producer prices for commercial products rose by 2.6%. While consumer prices as a whole increased by 1.8% from 2017 to 2018, consumer prices for shoes rose by just 0.9% during the same period.

Imports

In 2018, the number of imported pairs of shoes increased from 699.5 to 708.4 million, but their value fell by 0.1%, going from 10.07 to 10.06 billion euros. Accordingly, the average price for the shoes imported to Germany dropped by 1.3% (14.40 euros vs 14.21 euros). The importance of China as the most important supplier country has decreased since 2015. The share of Chinese shoes in the total quantity of all shoes imported to Germany has been falling continuously in the last three years. Things were different in 2018: last year, the share of footwear originating from China rose from 46.6 to 47.2%. In the number of pairs, a 2.6% increase (from 326.1 to 334.7 million pairs) could be observed. Increases for Indonesia (+10.5% to 34.7 million pairs); India: +2.0% to 20.0 million pairs) and Cambodia (+7.9% to 16.5 million pairs) were registered.

The smaller growth rate in shoe imports compared to previous years is also seen in various shoe segments. In the largest import segment, shoes with fabric upper, the imported quantity of shoes rose by 0.5% from 286.1 to 287.5 million pairs. Higher increases for shoes with plastic upper (+6.3% to 180.4 million pairs) and for shoes with rubber upper (+3.7% to 54.2 million pairs) were recorded. In 2018, the quantity of imported shoes with leather upper fell by 2.8%. Whereas 188.2 million pairs of shoes with leather upper were still being imported to Germany in 2017, 182.9 million pairs were imported in 2018.


Exports

In 2018, Germany exported 306.2 million pairs with a total value of 6.8 billion euros, a 7.7% increase in the exported number of pairs. The average price of a pair exported from Germany was 22.34 euros, a 1.3% increase. In 2018, Poland took the place of France as the most important destination country for German shoes. In 2017 and 2016, France was the biggest destination country for German shoes. From 2017 to 2018, exports of shoes from Germany to Poland rose significantly with the number of exported pairs increasing by 28.6%, going from 36.2 to 46.5 million pairs. At the same time, shoes exported to France fell by 6% to 36.5 million pairs. A decrease in shoe exports was also seen for important destination countries such as the Netherlands (-9.3% to 24.1 million pairs) and Slovakia (-8.8% to 23.8 million pairs). The positive development of the Italian market in the first six months of 2018 continued: Germany exported a total of 21.6 million pairs of shoes to Italy in 2018. Compared to 2017, this corresponds to a 31.3% increase. In 2018, the British market became more important: the share of exports rose from 6.4% to 6.7%, explained by the larger number of exported pairs of shoes in 2018, which increased 11.4% to 20.3 million pairs compared to 2017.


Outlook

The difficult situation in the sector characterized by consumption weakness also dampens the mood of German footwear manufacturers. This indicates the current HDS/L business survey among German footwear manufacturers: Almost half of them point out to a poor to satisfactory sales trend and situation of the orders in the past three months. Manufacturers do not expect foreign trade to improve in 2019. About one-half of the surveyed companies assumes no change in exports. For this reason, the sector is cautiously optimistic about the future.

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Related Organizations

  • BDSE - Federal Association of the German Footwear Retail Trade

    BDSE - Federal Association of the German Footwear Retail Trade

    Germany
  • Leather Institute German Tanners' School Reutlingen

    Leather Institute German Tanners' School Reutlingen

    Germany
  • FILK - Research Institute of Leather and Plastic Sheeting

    FILK - Research Institute of Leather and Plastic Sheeting

    Germany
  • HDS/L - Federal Association of German Footwear and Leather Goods Industry

    HDS/L - Federal Association of German Footwear and Leather Goods Industry

    Germany