Do you know up to what extent the International unstable situation is affecting the Leather Goods Manufacturing industry in Ubrique? If you would like to know more about this, just continue reading.
The current uncertain situation in the world is also affecting the fashion industry as a whole, and our leather goods guild is not escaping from it. The world is changing and not all of the changes are for the better. In the last few years, we have seen a lot of geopolitical transformations and shifts that have affected many industries and people around the world. When changes happen slowly, we all have time to adapt ourselves in an easier way. However, we are experimenting fairly abrupt ones, which is not providing us enough time to digest and react accordingly.
Today, we would like to focus on one of the main consequences this unstable situation. Prices of raw materials have sharply increased due to the uncertain world situation. It is not only happening in Europe, but worldwide. The international conflicts and the post-COVID situation have caused instability in the market and, up-today, there are no signs of it getting any better in the short term. In Europe, we can see how the prices for natural resources like oil and gas are rising as well as the price for steel, copper, aluminum, nickel and the majority of chemicals.
Manufacturers face cascading challenges through the supply chains. As prices continue their upward climb, manufacturers are still dealing with the two supply chain headwinds, plaguing the industry throughout the pandemic: slowing supplier deliveries and labour availability. This is really affecting the way business is currently done as buyers and manufacturers are being forced to confirm orders; and source raw materials in a much shorter gap than they used to do it only a couple of years ago as prices may increase between order confirmation and the sourcing of the raw materials.
Would this situation last long? Economists share the view that price increases at the factory gate will not be long-lasting limiting the overall impact on inflation. We really hope this unstable situation happens soon. We all need more certainty and stability in the behaviour of the market in general and in prices in particular.