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The economic recovery across Europe remains frustratingly slow and tepid, with the latest promises for a 'brighter tomorrow' deferred yet again. Despite calls since the 2008/09 global financial crisis from many pundits that Europe's economy is gaining strength and on the cusp of a return to vibrant growth, these upbeat forecasts have not materialized for the continent as a whole. Granted, the labor market continues to improve over the last three years, with the EU28 unemployment rate tapering to just 8.8%, the lowest in seven years. And a continued accommodative monetary policy, improved confidence, low commodity prices, and a weak euro will continue to support growth, says
a recent World Bank report. But dull investment and weak manufacturing output suggest economic growth across much of Europe will remain lackluster well through 2016.
The most recent evidence supporting this view comes from the latest read on the health of the eurozone. The Markit Flash Eurozone PMI slipped to a 16-month low of 52.9 in May. Readings in key economies France and Germany exceeded expectations for the month, suggesting periphery markets underperformed relative to expectations. As the accompanying graph demonstrates, the latest two months' weak data imply eurozone economic growth is likely slowing in the second quarter to a pace of just 0.3% (1.2% in annual terms). If so, the region's economy will remain on pace to expand at a modest rate this year, perhaps falling short of already-slower growth expectations from the World Bank (2.1%), IMF (1.5%), and the OECD (1.4%). And the risks to medium-term growth remain weighted to the downside, particularly given the looming June 23 UK referendum on whether the country will withdraw from the European Union.
Less upbeat growth forecasts strongly suggest less upbeat projections for consumer spending, the key component of economic activity. In turn, this view casts a pall over the outlook for European retail activity across a number of sectors, including footwear sales. To be clear, footwear demand across the continent is almost certain to expand in 2016, albeit not as robustly as many expected just a few months ago. And by extension, this outlook could weigh on retail footwear prices across Europe and dampen import demand in coming months.
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Recent European Retail/Footwear News that Caught Our Eye
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Footwear News
On Tuesday, Adidas announced that its groundbreaking Speedfactory is ready for production to begin. The brand publicized last year its intention to build the factory, which will have the capability to turn customized shoe production into an automated process.
British customers have remained loyal to general merchandise retailers for all their needs when shopping online, according to new research. A study found that the top ten everything retailers attract close to two-thirds of all online visits in the UK and overall traffic on these sites has grown by 2% year-on-year, based on monthly figures.
London-based Edoardo Bortolato and Niloufar Sassani have recently launched a new footwear label, Boté a Mano, inspired by the different traditions of Eastern and Western cultures.
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EU Footwear Production and Import Report
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Footwear imports entering the European Union gained traction in February, rising in both volume (up 6.9%) and euro terms (+8.7%) from a year earlier, the 30th straight month that the value of footwear entering the 28-member bloc rose from a year earlier, the second-longest streak on record.
 Reaching almost 4.9 billion euros, these imports climbed to the second-highest reading on record, propelled by a number of key suppliers. While imports from largest-producer China declined, the value of shipments from second-place Vietnam surged 18.0%, the 25th double-digit year-over-year advance in the last 26 months.
This growth in total footwear imports pegs year-to-date shipments into the region up 7.3% in volume terms and 9.0% in euro terms. While early in the year, these advances hint the value of total shipments may climb again in 2016 to another record, higher fifteen of the last seventeen years.
These comparable percentage gains in year-to-date imports imply YTD unit costs are little changed, up a modest 1.6% from the same first two months of last year. This moderation eases our concern voiced last month of a divergence between rising values of imports and sinking volumes, causing unit costs to jump earlier. This more moderate increase in unit costs also eases earlier presumptive pressure on retailers to boost prices to consumers.
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Don't Miss a Discussion on the EU Free Trade Agreement (T-TIP)
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We kick start the summit in style with a cocktail networking reception on Wolverine Worldwide's roof-deck patio in midtown on Monday night, July 18. On July 19th, the full day summit takes place at the NYSE.
We invite you to attend the 2016 Footwear Sourcing Intel Summit in NYC
- the only event focused 100% on global footwear production and sourcing issues. Providing key information you need as well as plenty of time to network with peers across the industry.
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Amber Road Insights: Uncovering and Mitigating Trade Risks in International Operations
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 International trade can entail significantly more risk than straightforward domestic business-to-business transactions. In collaboration with Amber Road, Supply Chain Movement has put together this Global EU Trade Map which provides an overview of current EU trade agreements and an insight into potential trade risks and how to mitigate them.
According to Aberdeen Research, "international shipments cost twice as much, take five times as long and have five times more variability than domestic shipments." Consequently, if a company is involved in overseas operations it is often exposed to a higher degree of risk, which in turn can significantly impact bottom-line growth and affect success across intra-company departments. While it is not possible to eliminate all the risks, international trade agreements between the European Union (EU) and other countries/regions can help to minimise the financial risk by reducing customs duties payable and improving market access.
Click here to read more information about the Global EU Trade Map.
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FDRA Hosts World Footwear Forum at FFANY in June
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Each year, footwear associations across the globe meet to discuss the current state of footwear production, trade, and retail. The meetings help drive best practices and FDRA uses the platform to push for the reduction of trade barriers; helping increase the free flow of footwear for companies and consumers.
This year's meeting will be held in NYC during FFaNY. FDRA will take this time to meet with Europe's leading footwear associations to focus on how we can work together to push and pass TTIP.
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