Wood handles with an oil finish offer a warm feeling and IMHO a better grip than hard plastic handles and are more robust than kraton. A leather sheath can be repaired more easily in the field than a manmade sheath. My personal favorite for handles is baltic birch as it combines the advantages of manmade and natural material. For the sheath I tend to prefer kydex as it offers more protection than leather.
The shrinkage or expansion of the natural materials is not really dramatic. It can however cause problems in combination with the quality of the build. When you know about the potential problems you can deal with them.