Tightening the belt: Ongoing weak downstream demand is shrinking industry revenue

The Leather and Leather Substitute Product Manufacturing industry includes operators that produce and process leather hides and other animal skins, as well as manufacturers of leather products, like wallets, saddles and handbags. Industry firms have struggled significantly over the past five years. Downstream demand from clothing and footwear manufacturers, which has declined over the period, is a primary driver of industry revenue. While leather is a key input for these manufacturers, it also competes with other fabrics and materials. Rising demand from personal accessory retailers has partly offset this trend over the past five years, as Australian consumers have increasingly demanded luxury goods. Despite this, industry revenue is expected to fall at an annualised 4.1%...read more.

Industry Statistics & Market Size
Revenue
$480m
Annual Growth 12-17
-4.1%
Forecast Growth 17-22
Profit
Employment
1,775
Businesses
421

Industry Threats & Opportunities

  • Greater global demand for industry products, mainly from China, has helped slow its decline
  • The industry is struggling due to falling demand from leather clothing and footwear manufacturers
  • There is scope for niche leather producers to expand production and access new markets
  • Industry Report - Industry Investment Chapter

    The Leather and Leather Substitute Product Manufacturing industry displays moderate capital intensity. For every dollar invested in capital across the industry in 2016-17, an estimated $7.61 is paid as wages. Capital intensity has remained relatively stable over the past five years, with wages and depreciation costs increasing as a proportion of revenue, partly due to the relatively faster decline in industry revenue. Some new technologies have been introduced over the past five years, including new tanning processes and inventory management to reduce the industry's reliance on labour and boost production efficiency. However, some parts of production still involve manual labour. For example, handbag and wallet manufacturing requires employees to operate stitching machines. Lea...purchase to read more.

    Additional Insights for the Leather and Leather Substitute Product Manufacturing Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Leather and Leather Substitute Product Manufacturing Industry are

  • Establishment of export markets
  • Guaranteed supply of key inputs
  • Ability to alter goods in favour of market conditions
  • IBISWorld analysts also discuss how external factors such as Demand from clothing and footwear manufacturing and Domestic price of wool in the Leather and Leather Substitute Product Manufacturing industry impact industry performance..

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    What's in this report

    What is the Leather and Leather Substitute Product Manufacturing Industry?

    Firms in the industry primarily cut, tan, finish and dye leather and animal hides, skins and fur. Companies are also involved in the production of sheepskin and slipe wool. Industry operators manufacture leather or synthetic leather handbags, wallets, suitcases, saddles and harnesses. The industry excludes leather clothing and footwear manufacturing.

    Industry Products
  • Bovine hides
  • Sheepskins and other animal skins
  • Processed leathers
  • Other products
  • Industry Activities
  • Animal hide
  • Automotive leather
  • Finishing hides and skins
  • Leather or leather substitute handbag, belt, saddle, suitcase and wallet
  • Slipe wool
  • Tanning hides and skins
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Demand from clothing and footwear manufacturing
  • Domestic price of wool
  • Real household discretionary income
  • Trade-weighted index
  • Demand from personal accessory retailing

  • Current Performance
  • Revenue and profitability
  • Industry structure
  • International trade
  • Chart: Revenue Growth

  • Industry Outlook
  • Industry changes
  • International trade
  • Niche leather products
  • Table: Leather and Leather Substitute Product Manufacturing Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Leather and Leather Substitute Product Manufacturing Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Footwear Manufacturing
  • Department Stores
  • Duty Free Stores
  • Personal Accessory Retailing

  • Key Selling Industries
  • Beef Cattle Farming
  • Industrial and Agricultural Chemical Product Wholesaling
  • Meat Processing
  • Sheep Farming
  • Synthetic Resin and Synthetic Rubber Manufacturing

  • Products & Services
  • Bovine hides
  • Sheepskins and other animal skins
  • Processed leathers
  • Other products
  • Chart: Leather and Leather Substitute Product Manufacturing Industry Products and Services Segmentation

  • Demand Determinants
  • Substitute products
  • Consumer preferences
  • Discretionary income

  • Major Markets
  • Other manufacturers
  • Retailers and wholesalers
  • Other firms
  • Chart: Major Market Segmentation for the Leather and Leather Substitute Product Manufacturing Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Profit
  • Purchases
  • Wages
  • Depreciation and other costs
  • Chart: Cost Structure Benchmarking – Sector vs Leather and Leather Substitute Product Manufacturing

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Leather and Leather Substitute Product Manufacturing Industry

  • Industry Globalization
    A I Topper & Co Pty Ltd, Schaffer Corporation Limited,
  • Table: A I Topper & Co Pty Ltd - financial performance
  • Table: Schaffer Corporation Limited - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Leather and Leather Substitute Product Manufacturing Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Leather and Leather Substitute Product Manufacturing Industry
    Includes:
  • Industry Revenue (2008-2022)
  • Industry Gross Product (2008-2022)
  • Establishments (2008-2022)
  • Businesses (2008-2022)
  • Employment (2008-2022)
  • Exports (2008-2022)
  • Imports (2008-2022)
  • Wages (2008-2022)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Green Fleshing
  • Removing the flesh from the pelt after soaking the skin, but before the liming stage.
  • Leather Tanning
  • The process by which leather is stabilised and protected from bacteria. In the tanning process, chrome powder or other chemicals are dissolved into the skin, which is then heated.
  • Liming Splitting
  • Cutting and splitting a single piece of leather into two lighter and thinner layers after the liming stage, as opposed to after the tanning stage.
  • Slipe Wool
  • The removal and processing of the skin and wool from a sheep carcass after it is slaughtered for its meat.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Leather and Leather Substitute Product Manufacturing market research report offers insightful industry analysis and research into the market at the national level. IBISWorld’s in-depth industry market research is presented in a logical and consistent format. The industry report contains key industry statistics, market size, industry trends, and growth and profit forecasts for a 5-year outlook period.

    IBISWorld industry market research reports enable you to:
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    This report on Leather and Leather Substitute Product Manufacturing:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Leather and Leather Substitute Product Manufacturing market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Leather and Leather Substitute Product Manufacturing, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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