It is not only the inflationary effect driving the turnover of the Italian industry which, according to the quarterly analysis by Prometeia and Intesa Sanpaolo on industrial sectors, recorded an increase of 2.3% at current values in the first four months of the year compared to the same period last year. Even net of the “price effect”, in fact, the deflated data remains positive, equal to an increase of 1.1%.
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Production, Italy grows, Germany declines
Production too – despite difficulties due to supply disruptions caused by the war in Iran and the closure of the Strait of Hormuz – stands at positive levels, with an increase of 1.4% in the March-May quarter (year-on-year), which in the first five months of the year translates into substantial stability (+0.8%). A trend similar to that of France and better than the German figure, which instead indicates a 3.4% decline, certainly not painless for the Italian production chains more linked to the German economy. Production is essentially driven by two factors, the report reads: the recovery of investments in machinery and technologies in the domestic market (not surprisingly, among the sectors recording the best turnover results is mechanics), as well as farsighted stock planning along the supply chains, which has allowed at least partial absorption of the scarcity and rising costs of raw materials.
The surprise of foreign markets
Positive signals also come from abroad, where better trends than the international scenario predicted have been recorded, amid US tariffs, growing competition from Chinese producers and geopolitical conflicts: Italian goods exports increased by 3.1% in the first four months, at current values, and by 2.2% at constant prices, thanks above all to the drive from pharmaceuticals and, surprisingly, the United States. “There are some structural factors of the Italian economy, often underestimated, that manage to mitigate the effects of the many criticalities of this conjunctural phase – observes Alessandra Lanza, senior partner of Prometeia -. One of the main ones is that the two twin transitions, environmental and digital, are going ahead despite everything: they are an unstoppable process and this supports demand, particularly in a market like the United States, where the push for innovation is very high. There are also some macrotrends supporting specific sectors, such as the aging population, which fuels the growth of the pharmaceutical industry.”
In this scenario, the sectors that have achieved the best results are those related to investment goods (mechanics, electrical engineering, electronics), as well as metallurgy and pharmaceuticals. On the other hand, sectors more impacted by energy price increases, such as transport and food, are declining.
Fears of inflationary tensions
However, the business confidence climate is worsening, the analysis reads: what worries companies most is the evolution of prices, that is the inevitable downstream impact of rising production costs along the production chain, up to final consumers, in a context of weak demand. “Even if a solution to the Middle East conflict were quickly found, it would be a temporary solution – says Lanza -. We are witnessing a paradigm shift, which has ended a world in which any crisis was managed through multilateral and globally accepted rules. Today crises are resolved, so to speak, through bilateral negotiations in the best case, or through power confrontations in the worst.” Price levels are inevitably destined to rise and these inflationary tensions will become increasingly visible in the coming quarters, leading to a drop in demand that will have to be addressed with a serious and structural wage increase policy.
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