Leather Industry in UK Sees Marked Decline in Trade, EUDR Poses Significant Risk

Economic challenges and falling consumer confidence ensured that demand for leather continued to fall impacting performance of the UK leather industry.

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  • Trade was greatly reduced with total export values down by 14.4% and total import values down by 20.7%, compared to 2022, and continuing the trend of declining trade that were starting to emerge at the end of the previous year.
  • A significant trend was the nearly 23% fall in the volume of exports of bovine finished leather.
  • The imminent introduction of the EU Deforestation Regulation (EUDR) brings a significant risk of extensive disruption to the trade in raw hides and bovine leather between the UK and EU.
The UK leather industry comprises specialist, high-end producers of automotive, upholstery, shoe upper and sole, gloving, chamois, equestrian leather and wet blue leather. The UK exports more than 80% of its leather production, with destinations in over 80 countries.
Major Exports The UK leather industry comprises specialist, high-end producers of automotive, upholstery, shoe upper and sole, gloving, chamois, equestrian leather and wet blue leather. The UK exports more than 80% of its leather production, with destinations in over 80 countries. caropat / Pixabay

The leather industry in the UK, after a brief reprieve in 2022, has shown a decline in numbers for the year 2023, with declining value and volume of both exports and imports.

  • Trade was greatly reduced with total export values down by 14.4% and total import values down by 20.7%, compared to 2022, and continuing the trend of declining trade that were starting to emerge at the end of the previous year.
  • The numbers come from Leather UK's latest report UK Leather & Leather Goods Industry in 2023.
  • The report remarked: The UK is not unique in this current difficult situation with national industry associations across the globe, and Europe in particular, reporting very difficult trading conditions.
  • The fall in the value of raw material exports was greater than the fall in volume, illustrating the decline in both the demand for leather and value of raw materials. In contrast, the values of part-processed and finished leather exports fell to a smaller degree than volumes, suggesting that price increases had been achieved albeit against a background of a decline in absolute demand.
  • A significant trend was the nearly 23% fall in the volume of exports of bovine finished leather—bovine leather accounted for almost 95% of UK finished leather exports—against a 14.5% fall in export values. The fact that while increasing prices for finished leather were being achieved, absolute volumes were in decline, was seen as a worrying trend.

TRADE WITH THE EU: The report said that the imminent introduction of the EU Deforestation Regulation (EUDR) brings a significant risk of extensive disruption to the trade in raw hides and bovine leather between the UK and EU.

  • The EU was the destination for 62% of bovine raw hides, over 90% of part-processed leather and 26% of finished leather exported by the UK in 2023.  Over 90% of raw hides, 68% of part-processed leather and 89% of finished leather imported into the UK came from the EU. Any disruption to this would be a challenge for the UK leather and leather good manufacturers.
  • Trade with the EU comprised 42.1% of total exports of raw materials and leather in 2023, down from 45.7% in 2022. Exports of raw materials increased slightly, accounting for 51.6% and 41.2% of the value and volume of exports in 2023.
  • The market for finished leather was diverse in 2023 with the EU accounting for only 26.8% of exports on a value basis.
  • The EU accounted for over 84% of all raw material and leather imports in 2023. Total imports for raw materials and part-processed leather rose lightly while the proportion of finished leather imports fell, in both value and volume.

OTHER TRADE TRENDS: The top five export destinations for raw hides remained unchanged, with the exception of Czechia replacing the Netherlands in fifth place. Four of the countries in top five were located in the EU. Northern Ireland remained the main exporter of raw hides to the UK by a very large margin, with Italy in second place.

  • As in 2022, China and Türkiye were the two main destinations for UK sheepskins. However, Turkiye moved above China as trade with the latter fell compared to 2022. Ethiopia remained the major exporter of sheepskin to the UK but values were down by over 90% compared to 2022, following the closure of Pittards PLC.
  • In 2023, the US was replaced by Morocco as the main export destination for finished bovine leather as exports to the African country more than doubled compared to 2022 and exports to the US fell in value. Italy and Germany continued to dominate exports to the UK but the value of exports from both countries fell compared to 2022, with exports from Italy down by over 25%. Imports from the other main exporting nations also fell, with imports down by nearly £24 million from 2022.
  • The key export markets for finished sheepskin leather remained largely unchanged but the value of exports fell by nearly 63%, including a 50% fall in exports to Thailand. This may reflect the loss of Pittards PLC, which was a supplier to footwear manufacturers in Asia. Italy and France remained the key importers, with both showing small increases in the value of exports to the UK and the total value of imports increasing slightly.
  • In 2023, the UK was again a net importer of leather goods. The trade deficit decreased in 2023, compared to 2022, down to £562m (cf. £645 million in 2022). This fall reflects the falling value of exports of leather goods which fell by 6.7% in value compared to 2022, albeit that volumes rose by 3.2%. This decline was balanced to some degree by falling values of imports.
UK Leather & Leather Goods Industry in 2023
UK Leather & Leather Goods Industry in 2023
  • Publisher: Leather UK
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  • Dated posted: 20 May 2024
  • Last modified: 20 May 2024