Unfavourable economic conditions among Canada's main trading partners will cause exports to decline
New York, NY (PRWEB) February 03, 2015
Similar to most consumer-goods manufacturing industries in Canada, the Footwear Manufacturing industry has had to contend with tough operating conditions over the five years to 2015. Rising input costs, slow growth in per capita disposable income, inflationary pressures, an appreciating dollar in the earlier half of the five-year period and intense competition from less costly imports have played a decisive role in this industry's decline. Over the past five years, volatility in the prices of rubber, leather and synthetic fibre and an uncompetitive cost structure due to high labour and utility costs have provided little impetus for Canadians to purchase domestically manufactured footwear. According to IBISWorld Industry Analyst Zeeshan Haider, “the consumer price index is estimated to increase over the five years to 2015, while per capita disposable income is expected to rise slightly during the same period, thereby causing discretionary purchases to decline.” Consequently, industry revenue is expected to fall over the five years to 2015.
However, the decline of the Shoe and Footwear Manufacturing industry is not a recent phenomenon, as it has been steadily declining for most of the past two decades. During the past five years, the industry was particularly hurt by a fall in per capita disposable income in 2010. Additionally, unfavourable economic conditions in the United States and an uncharacteristic appreciation of the Canadian dollar in the earlier half of the period also restricted revenue growth. “The United States is the largest importer of shoes from Canada, and US imports from Canada have dramatically declined over the past five years, severely hurting industry revenue,” says Haider.
IBISWorld does not expect this industry's fortunes to significantly change over the five years to 2020. Revenue declines are expected to be far less severe during the next five years as a result of less room available for foreign competition. A decline in the Canadian-dollar effective exchange rate will also benefit the industry; however, it will not be enough to reverse overwhelming trends indicative of this industry's decline. Overall, IBISWorld expects industry revenue to decline during the five years to 2020.
For more information, visit IBISWorld’s Shoe and Footwear Manufacturing in Canada industry report page.
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IBISWorld industry Report Key Topics
The Shoe and Footwear Manufacturing industry manufactures footwear for men, women and children. Orthopedic footwear and specialist athletic footwear, such as skates or roller blades, are 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
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