US economic slowdown hits Brazilian footwear producers
The Brazilian shoe industry was among those offering the greatest number of job opportunities in 2000. This year, however, the situation is completely changed, as the industry has stopped recruiting and is having real difficulty in retaining its employees.
The main reason is the combined effects of the US economic slowdown and a 50% rise in the price of leather since the beginning of the year. In the first two months of 2001, the USA accounted for 72% of all footwear exports from Brazil's largest shoe manufacturing cluster of the Vale do Sinos. Since then, the numerous small to medium sized enterprises which account for a large proportion of the region’s output have been forced to cut back on production and make staff redundant as demand has cooled. Depending on the individual factory, US orders have fallen 10% to 20%.
To compensate, an increasing number of producers are turning their attentions to other markets, including the home market, other Mercosur countries and even Europe. Despite the situation, Ricardo Wirth, vice president for exports of Abicalcados, the Brazilian Association of Footwear Industry, says the sector's exports should still grow by 15% in 2001, as per previous estimates.
