French Leather Exports Dip Amidst Shifting Global Demand

The French leather industry experienced a notable downturn in its export performance during the first nine months of the year, with total exports declining by 3% to reach 13.7 billion euros. This reduction, as highlighted by the Economic Observatory of Alliance France Cuir, is primarily attributed to a significant drop in orders originating from key markets in Asia and the United States, signaling a challenging period for one of France's prestigious sectors.

Delving into the geographical specifics, the economic report indicates a substantial 7% fall in exports destined for Asia. This decline was broadly felt across the continent, with China and Hong Kong seeing a 5% contraction, Japan an 8% decrease, Singapore experiencing a sharper 27% reduction, and South Korea also down by 7%. Concurrently, exports to the United States registered a 2% decline. In contrast to these struggling markets, European demand demonstrated a degree of resilience, showing a modest strengthening of 0.7% over the same period.

Examining export performance by product category reveals consistent declines across most segments. Exports of raw hides and skins fell by 2%, while the tanning and dressing sector saw a 1% decrease. Both the footwear and leather goods markets registered a 3% contraction in their export figures. Interestingly, despite the fall in exports, the leather goods sector stands out as the only segment where companies collectively reported growth in cumulative revenue, posting a 3% increase, suggesting robust domestic demand or other revenue streams counteracting export challenges.

On the import front, the industry maintained stability, with total imports holding steady at 10.4 billion euros over the nine-month period. A significant shift in sourcing trends was observed, characterized by a 7% drop in orders placed with European suppliers, offset by a corresponding 7% rise in supplies from Asian countries. This strategic pivot benefited several Asian nations, with Vietnam seeing a 13% increase, Indonesia and India each up by 6%, Cambodia experiencing a substantial 22% rise, and China also contributing with a 3% increase. This reorientation in supply chains has notably impacted average customs prices, leading to a 3% decline for shoes and a more significant 13% drop for handbags.

Further analysis of imports by sector shows varied movements. Increases were recorded in footwear imports, up by 2%, and in the tanning and dressing sector, which rose by 4%. Conversely, imports of raw hides and skins decreased by 6%. The leather goods category also experienced a downturn in imports, with an estimated 2.7% fall in the production of handbags, encompassing all materials. These figures highlight dynamic adjustments in both supply sources and product category demands within the domestic market.

Despite the export challenges and shifts in import sourcing, the French leather industry successfully maintained a substantial trade surplus over the first three quarters of the year. Although slightly reduced from 3.7 billion euros to 3.3 billion euros, this surplus underscores the sector's inherent strength and global competitiveness. The industry, comprising 580 companies, collectively achieved a turnover of 5.5 billion euros in the previous year, solidifying its position as a vital contributor to the French economy.