Italy’s Industry: Production Down since Almost 2 Years
The president of the Italian industry organization “Confindustria”, Emanuele Orsini, said yesterday: “Relaunch investment is necessary. From Stellantis to Beko, factories are in crisis since 21 months.” Before Covid, in 2019, the share of wealth generated by the Italian industry was 19,9 percent of GDP. Today Italy is down to 18.1 percent.
Basically, two points less in just five years. A major crisis had been already with the 2008 crisis. In fact, the industry's share was 22 percent in the year 2000. Dead and wounded then, the industry remained on the ground. Only the companies survived in the market that could withstand international competition.
But now it seems that history is repeating itself. Orsini: “The epicenters of the earthquake in manufacturing are more than one. Certainly the auto. But also home appliances. And then textiles and footwear. One might say: We can produce less machinery and “things” if we compensate with services and tourism. But that's not really the case: The industry generates more value added and in many cases provides better quality and higher paid work.”
Before the actual backdrop the industry has continued to record bad news on the calendar for the past few months. First of all, industrial production has been declining for 21 months. Yesterday, the already minus-sign-filled bulletin from “Istat” was joined by one from the Confindustria study center. Which says: “In October, production continues to record a 3,6 percent trend decline (i.e., compared to the same month in 2023). A very heavy result in particular for vehicles ( minus 34,5 percent) and leather goods (minus 17,2 percent).”
Tough times, and so the industry reacts by investing less. An interesting indicator comes from data - also released 2 days before – from “Ucimu”, the association of machine tool and robot manufacturers: Machines are bought normally by factories that want to innovate and produce better and more. But in 2023 the domestic market fared very badly: minus 33,5 percent the value of sales to Italian companies.
If Italy doesn't buy, all that's left for Italian industry is to knock abroad. And indeed on this Italy has done well, climbing the ranking of exporting countries and even surpassing Japan. But now, according to the Confindustria study center, “Italian goods exports, after three consecutive quarterly declines remain weak in the fourth. Non-EU sales fell in October (minus 3,5 percent in value), due to the slowdown in the U.S. market and the fall in exports to China (minus 21,3 percent in the first ten months). Especially the U.S. and Germany buy less.
Interviewed by “Ansa”, the president of Confindustria addressed a kind of call to arms to the entire manufacturing world. Not only to entrepreneurs, also to trade unions: “2025 will be a crucial year”, Orsini said. ”Only by working together, including with the unions, can we face the great challenges that await us, to safeguard jobs and entire industrial sectors. In other words: The enemy is outside, at home we tighten ranks.”
But the Italian government of Giorgia Meloni is telling the opposite – “The Italian industry was never so good functioning like under our government” ....
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