US tanning and finishing sector struggles
The leather
tanning and finishing industry suffered during the five years
to 2012, according to a new report from IBISWorld.
The market research provider found that lower disposable
income led consumers to tighten budgets and buy fewer leather luxury items,
such as handbags. Consumers also big-ticket item purchases such as household
furniture and car purchases.
However, rising demand beginning in 2010, coupled with a
24% spike in hide prices, caused revenue to grow 61.9%.
Between 2007 and 2012, revenue is anticipated to fall 1%
per year on average to $1.8 billion, including a 1.5% drop in 2012.
According to the US Hide Association, American tanners
continued to be the world's largest exporters of leather in 2012. The
association claims US firms often export hides to lower-cost countries for processing,
and then reimport the finished leather.
During the five years to 2017, IBISWorld expects the
industry to endure further revenue declines, though at a slower rate than in
the previous five years. It believes many leather tanning and finishing
operators will relocate so they are closer to downstream manufacturers based
overseas.
