Defense spending on military and work boots has kept revenue positive
Los Angeles, CA (PRWEB) January 31, 2013
Producers in the Leather Boot Manufacturing industry are benefiting from a trend toward natural materials and support for domestically produced footwear, especially by the federal government. For example, government spending on defense grew 6.2% in 2009, which boosted demand for military and work boots. Defense spending remained high the following year when disposable income began to rebound after the recession and consumers splurged on discretionary items like leather boots. These trends kept revenue positive over the past five years, pushing it up 0.6% annually on average.
This year, however, decreases in federal funding for defense are anticipated to dent Leather Boot Manufacturing industry revenue, causing it to decline to an estimated $356.5 million by year-end 2013. Additionally, the strengthening US dollar will benefit pricing for imported boots and intensify competition.
Early in the past five years, though, the US dollar was weak and contributed to industry revenue growth by making domestically produced goods relatively cheaper than imports. Nonetheless, low-cost suppliers in China and Vietnam can deliver leather boots at lower prices than local firms, making domestic goods less attractive to consumers. As a result, companies have shifted toward designing and marketing activities, while contracting production to third parties or opening up their own facilities abroad. Due to outsourcing activity, IBISWorld estimates that the number of industry firms declined at a 4.0% annualized rate to 22 in the five years to 2013. Conversely, some operators have kept production local, focusing instead on high-end designs that carry a higher price tag in niche markets.
Companies are expected to invest more in technology as access to credit improves during the next five years. More efficient production facilities will help companies compete based on price, but import competition will continue to intensify and pose a threat to the industry as foreign facilities develop methods to improve their product quality. Furthermore, input price growth will continue to pressure profit during this time. Specifically, the prices of leather and rubber are forecast to grow through 2018, increasing costs for the Leather Boot Manufacturing industry. For more information, visit IBISWorld’s Leather Boot Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
Companies in this industry primarily manufacture men’s and women’s leather boots. Revenue from producing other shoes or boots made from alternative materials is not included in this industry.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.