NONRUBBER FOOTWEAR QUARTERLY STATISTICAL REPORT
(2ND QUARTER 1995)

HIGHLIGHTS

U.S. production.--U.S. nonrubber footwear production in the second quarter of 1995 rebounded by 3 percent over that in the corresponding period of 1994; total output in the first half of 1995 was 82.1 million pairs, down by less than 1 percent from that of a year earlier. The increase in the second quarter followed, on a year-over-year basis, five consecutive quarters of decline. The value of U.S. producers' shipments rose by 4 percent in the second quarter but declined by 2 percent in the first half, to $1.8 billion (table 1).

The decline in U.S. output so far this year largely reflects a sluggish U.S. nonrubber footwear market, which was down by 1 percent in both the second quarter and the first half. The U.S. industry's share of the market remained fairly stable by volume at 11 percent but fell by 1 percentage point, by value, to 26 percent. Employment in the nonrubber footwear industry continued to decline, dropping by 6 percent in both the second quarter and the first half. Footwear prices at the U.S. producer level averaged a 2-percent increase in the first half while those at the consumer level declined by 1 percent (table 2).

U.S. imports.--U.S. imports of nonrubber footwear also have remained sluggish so far this year. They declined by 2 percent in the second quarter, following a gain of less than 0.5 percent in the first quarter, and were down by 1 percent in the first half to a total of 559.6 million pairs (table 3). The value of these imports rose by 3 percent in the second quarter and by 4 percent in the first half to $4.8 billion. Imports' share of the U.S. nonrubber footwear market remained relatively unchanged at 89 percent (by volume) in the first half of 1995.

China continued to expand its dominant share of the U.S. nonrubber footwear market in the first half of 1995, when its market share rose to 56 percent by volume from 52 percent in the corresponding 1994 period. Imports from China rose by 7 percent in the second quarter and by 6 percent in the first half, bringing the first half totals to 352.8 million pairs, valued at $2.2 billion. By contrast, the volume of imports from all other suppliers together declined by 17 percent in the second quarter and by 11 percent in the first half.

Italy was the only other major supplier to increase its nonrubber footwear shipments in the second quarter of 1995. Imports from Italy rose by 13 percent that quarter and by 9 percent in the first half to 28.3 million pairs, valued at $491 million. The depreciation of the Italian lira against the dollar made Italian products more price competitive in the U.S. market and contributed largely to the recent acceleration in imports from that country.

By contrast, the appreciation of the Spanish peseta in the second quarter of 1995 and the Brazilian real since July 1994 affected in part their shipments to the United States. Imports from Spain, following a 61-percent growth by volume in 1994, dropped by 17 percent in the second quarter, bringing the first half gain to 4 percent. Imports from Brazil, the second leading supplier, declined by 26 percent in the second quarter and by 20 percent in the first half, bringing the total to 58.3 million pairs, valued at $574 million.

Imports from Indonesia and Thailand, the third and the seventh leading suppliers of mainly nonrubber athletic footwear, declined by 13 and 7 percent, respectively, in the second quarter, bringing the first half declines from these countries to 7 and 1 percent, respectively. Imports from these countries have been affected by sluggish demand for athletic footwear in the United States.

Rapid declines in imports from Taiwan and Korea continued into the second quarter of 1995 as footwear production in these countries continued to shift into China and other low-labor-cost countries of Asia. Imports from Taiwan and Korea both declined by about 40 percent in the second quarter of 1995, bringing the first half decline for Taiwan to 36 percent and that for Korea to 34 percent.

The volume of nonrubber footwear imports from Mexico rose by 55 percent in the second quarter to 2.4 million pairs, while the value of these imports increased by only 8 percent, reflecting a 30-percent drop in the unit value. During the first half, imports from Mexico increased by 44 percent by volume to 4.4 million pairs, valued at $51.8 million, reflecting a 25-percent decline in the unit value. Over three-fourths of these imports were leather footwear, especially boots. Significant depreciation of the Mexican peso against the dollar improved the price competitiveness of Mexican products in the U.S. market and has largely contributed to their rapid growth.