Industry In Canada

Leather Industry in Canada By having a glance at Canada’s economy and what today’s GDP data show, the outcome seems horrifying. The Globe and Mail published March 31, 2015 by Michael Babad reported that Canadians would be facing an awful economic year in the first quarter as Stephen Poloz warned. “January is set to start the year off with a whimper, a sign of things to come in what is likely to be a disappointing Canadian economy in 2015,” quoted Nick Exarhos of CIBC World Market. He also mentioned the weak displaying and presenting in retail and manufacturing regions, which dropped 1.7% in January, while he believes Canada is not starting a recession. Due to the oil shock, workers in energy companies are under the pressure of being
laid off and cutting off budgets. This situation affects the unemployment rate, which is now 6.8% in Canada. As the central bank governor told The Financial Times, oil shock really matters now and the first quarter of 2015 will be a horrible economic year. This situation not only may affect all Canadian industries directly or indirectly, but also the unemployment rate and those who are in labor force. An example can be Leather Industry in Canada, which continues to shrink.
According to Sharon Boyer, an industry analyst in the manufacturing, construction and energy division, there is a decline in Canada’s Leather and Allied Products Industries, Major Group 17 since 1997 reported on Statistics Canada. Major Group 17- Leather and Allied Products Industries are divided in 4 groups and they are SIC 1711, SIC 1712, SIC 1713, and SIC 1719 each with a definition. SIC 1711 or Leather Tanneries is a stage where leathers from all kind are being transformed from raw materials to a finished product through cleaning, grooming, and finally coloring. SIC 1712 or Footwear Industry is a stage where footwear is made from processed leather. SIC 1713 or Luggage Purse and Handbag Industry is a stage where carry-on luggage, purses and handbags of leather, plastic, textile or some other materials are manufactured. SIC 1719 or Other Leather and Allied Products Industries is a stage where products usually associated with leather are manufactured. Leather coats could be one, made of leather and other materials may
include. The Leather and Allied Products used to have a high competition globally back in years. The competition was high during 1960s, however; in the early 1970s the case of “dumping”, a term used to selling products at a value below cost, happened to some sport shoes such as sneakers. This led to federal government collecting grants around three million dollars to the Footwear Industry. In 1977, because of the successful anti-dumping system the Footwear Industry was granted again. The quotas of grants were lasting until 1988. Value added for Leather and Allied Products Industries dropped by 4.6% in 1996 to $425 million plus an 11% decline in 1995. In addition, Footwear Industry’s value added dropped by 7%. Same thing happened to Tanneries by a 6% decline. GDP had a decrease of 10% in 1996 to $350 million. Hopefully there was a 6% increase in GDP during 1997, however; it began to decline in the first three months of 1998. There was a reduction both in the number of production employees who were working in Leather Industries in 1996 up to 7.4%, and their wages up to 6.1% compared to 1995. The Footwear Industry itself employed 68% of production workers, and the average annual salary for each employee increased 1.4% to $20627. Overall, the Leather Industry remained the second lowest hourly paid manufacturing district after the Clothing Industries. A notable case is the continuous price increase for leather products, especially leather footwear, averaging 6% in 1996 and 3% in 1997. In 1996 marketing for footwear had a recession of 11.8% beginning from 1995. The reason was more than 70% of Canadian markets were importing. Because of a successful launch of a new winter boots manufactured in Canada, over 70% of Canadian exports were shipped. In recent years, the footwear exports had an increase; it was 9% in 1996 and 10.6% in 1997 reaching $146.7 million. To conclude from whatever has happened to Leather and Allied Products Industries, during 1990s there was a fluctuation for this industry, also for the Footwear Industry.
According to the relatively high demand for winter boots during 1997, Canadian products failed to meet the demand, since majority of people were seeking for imported products. Although Canadian dollar at a low value could speed up the exports, raw materials imported to Canada increased prices, especially footwear. Since leather products such as designer handbags, carry-on luggage, shoes, boots; etc. are currently considered luxury goods; there is an increasing demand for owning them. Canada’s Leather Industry should be aware of the current trend and try to produce leather goods in a way to meet the demand and catch up with today’s fashion. In addition, employees who work for leather production should be paid fairly in order to be more productive so they can reach the maximum capacity of manufacturing leather
products.

Works Cited www.theglobeandmail.com>Report on Business>Business Briefing
www.statcan.gc.ca/pub/33-251-x/1998/4059323-eng.htm