REGIONAL REPORT
Economic outlook
According to the OECD’ s‘ Economic Survey of Italy 2024’, a strong fiscal policy response, enhanced competitiveness and improved banking sector health have supported growth in recent years. However, public debt is high and spending pressures come from population ageing, higher interest rates and the green and digital transitions. Steady fiscal consolidation is needed over several years to put debt on a more prudent path, said the OECD.
“ Regulatory barriers to competition in services should be reduced. Raising employment, including by expanding access to early childhood education to reduce barriers to female labour market participation, would make growth more inclusive. Additional policy efforts are needed to accelerate the reduction of greenhouse gas emissions and adapt to climate change. Renewable power generation has advanced, but complex permitting procedures that hold back the installation of renewable energy capacity need to be simplified,” said the OECD.
“ The economy faces challenges from low productivity growth, low labour market participation, especially of women, and relatively high poverty. Transitioning to innovation-led growth, while strengthening inclusiveness, will require a comprehensive package of reforms. The ongoing civil justice and public administration reforms will be crucial to raise investment and productivity,” it continued.
In May 2024, the IMF( International Monetary Fund) projected growth in Italy to moderate over the next few years, with disinflation continuing. GDP was projected to rise by 0.7 per cent in 2024 and 2025 as accelerating NRRP-related spending— to be finalised by mid-2026— largely offsets the phasing out of Superbonus-boosted residential investment. The NRRP is Italy’ s National Recovery and Resilience Plan.
The IMF expected a subsequent temporary growth slowdown in 2026 and 2027 as the NRRP is completed, with a more gradual slowing if the allowable spending period were extended. Thereafter, growth was expected to return to potential, which would increasingly reflect the shrinking national working-age population unless offset by rising productivity underpinned by effective structural reforms and investments, higher labour force participation and the continued absorption of overseas workers.
Machine tool orders
In the fourth quarter of 2024, the index of machine tool orders, compiled by UCIMU-SISTEMI PER PRODURRE( the Italian machine-
Image: LAMIERA.
Plasma cutting.
Riccardo Rosa, President, UCIMU.
Milan, Italy.
The main destination markets for Italian machine tools were the United States(+ 17.8 %); Germany(+ 12.3 %); China(-15.3 %); India(+ 100 %) and France(-9.3 %)
tool, robot and automation systems manufacturers’ association), showed an 11.4 % increase compared to the period October-December 2023.
On the domestic front, orders recorded a 33.3 % upturn compared to the fourth quarter of 2023. Conversely, orders from outside Italy were down, recording a 6.5 % drop compared to the same period in the previous year.
“ On an annual basis, order intake remained in negative territory registering-5.6 % versus the 2023 figure with domestic orders at-3 % and overseas orders at-7.5 %,” confirmed the association.
Riccardo Rosa, President of UCIMU, stated:“ The overall outcome [ of orders in 2024 ] is among the most disappointing in the last few years. Business in overseas markets, which flourished for a good part of the year, allowed us to limit the [ shortfall ].
“ On the other hand, for the last quarter, the double-digit increase is good news as it also confirms the small trend reversal we had already recorded in the previous quarter. That said, concerns remain over the trend this year because, in addition to weak domestic demand( which is struggling to restart), there is a clear slowdown [ in overseas business ],”
he added.
He highlighted areas of uncertainty in Italy, as well as abroad. With the United States a key export market for Italian machine tools, U. S. tariffs are casting a long shadow. Geopolitical shifts in global markets, pointed out
Rosa, also need to be taken into account.
“ Germany’ s difficulties, Europe troubled by automotive issues, the closure of important markets such as Russia and the growing division of the world into two blocks with a China that is increasingly distant, are forcing companies in our sector to take new steps in terms of globalisation aimed at intensifying their presence in the countries of greatest interest. In this sense, the‘ Oficina Italiana de Promociòn Mexico’ initiative, launched by UCIMU in the second half of 2024, is an example of how representative organisations can support organisations in a market with high [ growth ] potential,” he continued.
Italian government Industry 4.0 incentives for machinery and systems conclude in 2025. Rosa urged the government to bring out a new industrial policy programme to further support the digital development of the Italian manufacturing industry.
“ After [ Industry ] 4.0 and 5.0, industrial production continues its technological innovation which will increasingly incorporate artificial intelligence. To ensure competitiveness in the manufacturing industry, it is necessary to encourage [ companies to replace ] obsolete machinery, rewarding those who invest in the latest production systems( and even more so if these include data training and management systems). We need to work on this. UCIMU is ready to start a dialogue on this with Italian government authorities,” added Riccardo Rosa.
Image: Shutterstock. com
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