In the coming months leather industry is very likely to face the impact of global recession, as the recession is likely to be more pronounced in the small industries sector. There has been a decline in leather export orders from the US and UK markets, the primary western markets. With the fall in the business volume of the industry because of low orders from the West, the Chinese market is also aggressively pursuing its business forward with the help of the Government there. The Indian leather industry accompanying obtaining help from the government, should be innovative in managing the situation, mainly in creative designing and skills utilization. Moreover there have also been job cuts. According to Farida Group's MD, M Rafeeq Ahmed, said that 200,000 jobs were at stake in the labor-intensive industry and this is indeed aa matter of concern for the recession.
Before the recession, leather goods were increasingly being sold in bigalls in US and UK but sales have gone down now. With India's 50% of total leather trade mean for export, whats happening in US is something to worry about for the leather industry. Exports of leather and leather products during 2007 and 2008 was at $ 3.47 billion, out of which $ 1.47 billion (42.44%) was from the export of leather footwear and components. Export of Leather goods accounted for $ 785 million (22.57%). These sectors would certainly be the most affected by the ongoing economic crisis in western markets.
Indian Finished Leather Manufacturers and Exporters Association's chairman, Dr Zackria Sait, remarked that small industries had been working to only 40-50 per cent of their total capacity in the last two months, and this might go down to 30-40 per cent in the coming months. Obviously this is going to have direct impact on the product sector and the result will be drop in value and volume to about 15-20% drop in the next six months. But there is also a good news that the recession had not made much impact on the leather garment sector.
Source by Rumani Phukan