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Profit Ratio of British Footwear Production Industry is Shrinking

The Footwear Manufacturing industry is expected to grow over the five years through 2018-19, with revenue anticipated to rise at a compound annual rate of 4.3% to reach £537.3 million. Industry growth has been facilitated by an array of government policies targeting innovation within the broader textiles manufacturing industry. Similarly, the increasing interest in high-quality British footwear has contributed to industry expansion as firms have aimed to capitalise on heritage brands and increased their presence abroad.However, despite the overall positive outlook, profit margins within the industry are expected to shrink over the five years through 2018-19, from 19.1% during 2013-14 to 11.2% in the current year.

 

The Footwear Manufacturing industry is currently in the mature phase of its life cycle. Industry value added is projected to contract at a compound annual rate of 1.1% over the decade through 2023-24. This compares disadvantageously with GDP, which is anticipated to increase at a compound annual rate of 1.7% over the same period. Although this suggests the industry is in the decline stage of its life cycle, IVA is likely to have been skewed by strong IVA growth over 2014-15 caused by strong demand for premium leather shoes from overseas.Technological innovation in the industry is limited to increasing efficiency and developments in inputs and materials. Additionally, industry goods are clearly segmented and widely accepted by downstream buyers. 

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