Leather Tanning and Finishing in the US Industry Market Research Report from IBISWorld Has Been Updated

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Leather tanners have suffered over the past five years; the industry will stabilize over the coming years, as demand returns slowly, particularly in the global footwear market. For these reasons, industry research firm IBISWorld has updated a report on the Leather Tanning and Finishing industry in its growing industry report collection.

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Downstream industries may increase demand, but rising import competition is expected to hurt performance.

Companies in the Leather Tanning and Finishing industry tan, curry and finish leather hides and skins. Leather is typically obtained as raw skins from slaughterhouses, and operators treat and dye them to produce finished leather. “Over the past five years, the industry has experienced highly volatile conditions because of massive fluctuations in international trade,” IBISWorld industry analyst Jeremy Edwards says. The onset of the US recession caused a global drop in demand for leather products. Plummeting consumer confidence and low consumer spending hurt manufacturing activity domestically and abroad. As a result, industry exports fell dramatically in 2008 and 2009, which caused industry revenue to plunge. Consumers held off on new purchases or switched to cheaper substitutes such as faux leather. However, a weak US dollar and renewed international confidence resulted in exports increasing by 53.6% in 2010. Furthermore, rising consumer confidence increased domestic demand for leather products, resulting in a 61.9% spike in industry revenue in 2010. Overall, industry revenue is expected to grow by an average annual rate of 2.1% over the five years through 2013.

The Leather Tanning and Finishing industry is primarily comprised of small, nonemploying firms. “The industry has struggled to compete with a growing number of imports over the past decade and firms have continuously downsized to maintain profit margins,” Edwards says. Firms in the industry tend to serve local and regional markets or specific downstream industries. For example, the industry's largest player, Eagle Ottawa LLC, produces leather for automobiles.

The industry is expected to grow in 2013 thanks to rising demand for exports and higher domestic demand. Rising consumer confidence and increasing demand from downstream manufacturers is projected to increase industry revenue by 3.8% to $2.0 billion in 2013. Industry profit margins are also expected to rise to 4.8% of industry revenue, though numbers will remain below prerecessionary levels.

Over the next five years, the Leather Tanning and Finishing industry is expected to face less volatile conditions. The industry is forecast to benefit from increased demand from downstream manufacturing industries, however, a large proportion of this demand will be met through imports rather than domestically manufactured items. Rising import competition is expected to hurt industry performance and cause declines beginning in 2014. Furthermore, the rising prevalence of international leather tanners and finishers is expected to cause the United States to lose international market share. Consequently, exports, the industry's largest source of revenue, are expected to decline over the next five years. Therefore, industry revenue is expected to decline in the five years through 2018. For more information, visit IBISWorld’s Leather Tanning and Finishing in the US industry report page.

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IBISWorld industry Report Key Topics

Companies in this industry are involved in the following activities: tanning, currying and finishing hides and skins; having others process hides and skins on a contract basis; and dying and finishing furs. Firms in this industry generally purchase or obtain raw skins from slaughterhouses and treat and dye them to create finished leather.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

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.

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Gavin Smith
IBISWorld Inc.
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