More bad news for Pakistani leather sector
According to the State Bank of Pakistan, leathergoods exports fell 13.5% year-on-year between July 2008 and February 2009. This was caused by a decline in overseas demand because of the global recession as well as various domestic structural issues. Raw material exports fell 22.5% during the same seven-month period.
Most of the country’s leathergoods exports are luxury items such as leather jackets and articles of apparel. However, its main markets—the EU and the US—have been hit particularly hard by the economic downturn.
On the supply side, like other sectors, the sector is faced with power shortages, rising production costs, an unskilled labour force and obsolete machinery.
Given the availability of raw leather in the country, leathergoods manufacturers have the potential to increase exports once these structural issues are addressed properly. However, it seems the problems will remain for the foreseeable future.
