ISMR July/August 2021 | Page 31

REGIONAL REPORT

The Thermal Integration and Reserve Plant , the new modern and futuristic heating system at the Polytechnic University of Turin .
momentum in the second quarter and should strengthen markedly in the second half of the year . On an annual basis , real GDP growth is expected to reach 5.0 % in 2021 and 4.2 % in 2022 . The forecast for 2021 is significantly higher than in spring . This is due to the sizeable upward revision to GDP in the first quarter and the stronger-thanexpected response of economic activity to the easing of mobility and business restrictions ,” it said .
“ The improving health situation that allowed most restrictions to ease significantly by June lays the groundwork for a solid and sustained expansion over the forecast period . Public and private investment , supported by firms ’ decreasing uncertainty about their demand outlook and the implementation of the Recovery and Resilience Plan , is set to remain the leading growth driver . Private consumption is expected to rebound sizeably , helped by improving labour market prospects and the gradual unwinding of accumulated savings . A dynamic external environment should benefit goods exports , but the return of tourist revenues is likely to be more gradual ,” it added .
The COVID-19 effect
Automobili Lamborghini show at Bangkok for the International Motor Show Thailand in 2019 . and employment growth resumes . High current levels of saving will come down gradually . New jobs , especially for the low-skilled , women and youth , will only return in 2022 ,” said the forecast .
“ Many of Italy ’ s structural challenges - the significant divides across regions , age , gender and productivity , as well as high levels of public debt - have been compounded by the COVID-19 crisis . The key priority for the recovery is to enhance the public administration ’ s effectiveness . This should include , in particular , public investment governance and improved co-ordination as well as implementation across different levels of government . This will be essential to effective utilisation of the funds available from the European Recovery and Resilience Facility ( RRF ) and realising the benefits of structural reforms ,” explained the OECD .
Small and medium-sized firms need to raise productivity and innovation to emulate top performers . In 2020 , a new package of generous incentives to support investment in digital technologies and R & D extended past measures of support . Nevertheless , said the OECD , ‘ a National Productivity Board could prioritise and drive policy action and accountability , strengthening the impact of innovation incentives and the reduction of red tape .’
The OECD has now brought out its Summer 2021 economic forecast for Italy , noting that economic activity proved more resilient than expected and increased slightly in the first quarter of this year , despite stringent containment measures .
“ Performance data from the manufacturing sector and business and consumer surveys suggest that real GDP growth gained further
The Bank of Italy ( Banca d ’ Italia ) carried out a survey of industrial and service firms ( Year 2020 ) and announced the results in July 2021 .
“ In 2020 , Italian production was hit hard by the impact of the COVID-19 pandemic . Sales declined by 8.6 per cent ; the contraction in turnover affected most firms and was worse for those in the sectors more directly impacted by the measures adopted to contain the virus . Hours worked fell by 10 per- cent , although the number of people employed only went down by 2.4 percent , thanks to the freeze on dismissals and the widespread recourse to wage supplementation schemes . The average growth in selling prices slowed to 0.9 per cent ,” said Banca d ’ Italia .
“ The outbreak of the pandemic in the early months of 2020 generated exceptionally high uncertainty over the economic outlook , which led to an immediate reduction in investment plans across the board , compared with those drawn up previously . Overall , investment spending fell by 8.6 per cent , against the plans for growth made at the end of 2019 .
“ For this year , firms expect sales to pick up again , although this would only partly compensate for the fall recorded in 2020 . They also anticipate a marked increase in investment , both in services and in industry , and expect employment levels to basically remain the same . On average , selling prices are expected to accelerate significantly ,” it added .
Output in the construction sector fell by seven per cent , despite growth in the public works segment . This was accompanied by a fall in profitability and an increase in the demand for financing . The number of people in employment did , however , increase .
“ Firms expect a marked recovery in output in 2021 , in both public and private sector construction ,” concluded the bank ’ s survey .
On an annual basis , real GDP growth is expected to reach 5.0 % in 2021 and 4.2 % in 2022
ISMR July / August 2021 | sheetmetalplus . com | 31