REGIONAL REPORT
Italy ’ s machinery and equipment industry plays a key role in supporting other manufacturing subsectors
supply chains have pushed up energy prices and inflation more broadly and intensified shortages of key products , even as global demand is slowing . Ensuring an adequate supply of energy is a priority ,” said the IMF .
“ A severe drought across the northern part of the country will further pressure food prices and exacerbate energy security challenges . Yields on Italian government bond have risen and spreads have widened on the prospective tightening of monetary policies and political uncertainty amid a weakened global outlook . Reinvigorating trend growth is essential to strengthen public to meet social , climate and other goals , while also moderating the high level of public debt ,” it added .
The IMF projected growth in Italy to moderate sharply and remain subdued owing to the war in Ukraine , monetary policy tightening , continued supply chain disruptions and higher and more persistent inflation . In all , the economy was forecast to expand by three per cent in 2022 , mostly on strong carryover from 2021 , with a further slowdown to around ¾ per cent in 2023 . Annual average inflation is expected to peak in 2022 at 6¾ percent and to moderate gradually thereafter . In subsequent years , as energy prices moderate , growth is forecast to pick up , reinforced by public investment spending under the National Recovery and Resilience Plan ( NRRP ).
IMF Executive Directors commended the authorities ’ effective pandemic policy response , which delivered a robust and full recovery . However , major new challenges brought about by elevated energy prices related to Russia ’ s invasion of Ukraine , as well as tightening financial conditions , global supply chain disruptions and political uncertainty have considerably dimmed the economic outlook . Together with longstanding weak productivity , these factors bring to the fore risks associated with Italy ’ s high public debt .
IMF Directors welcomed the authorities ’ commitment to their National Recovery and Resilience Plan and commended the timely implementation of Next Generation EU-related targets and milestones . They recommended continued steadfast progress to lift labour productivity , investment and potential growth , as well as to accelerate the green transition .
Italian automotive technology on display . Image : Shutterstock . com .
Olivier François , FIAT CEO and Stellantis Global CMO , with the fully electric New Fiat 500 .
“ The efficient execution of public investment and strong reform momentum will be essential for success . Improving carbon tax design , making green investment incentives more cost-effective and streamlining approval procedures for investments in renewables would help to accelerate decarbonisation and strengthen energy security ,” outlined the IMF .
Several IMF Directors also saw merit in a coordinated EU approach on carbon taxation . Directors encouraged a continued strengthening of the anti-corruption and AML / CFT frameworks .
Manufacturing in focus
“ The Italian manufacturing sector is critical to its economy , with its strong global brand and reputation . It mostly includes small and medium enterprises with less than ten employees . Currently , the manufacturing sector is established enough to take advantage of the technological transformations in the industry due to the Industry-4.0 revolution . It is actively looking to leverage its educated workforce , strategic geographical position in Europe and reputation for high-quality products ,” commented analyst , Mordor Intelligence .
“ Italy ’ s most significant industry is manufacturing , making up 88 % of all production . Manufacturing is made up of the following major subsectors : metallurgy and fabricated metal products ( 14 % of total production ); machinery and equipment ( 12 %); food , alcohol and tobacco ( 10 %); rubber and plastics products and non-metallic mineral products ( 9 %); textile , clothing and leather ( 8 %); transport equipment ( 7 %) and other manufacturing , repair and installation of machinery and equipment ( 13 %),” it added .
Italy ’ s machinery and equipment industry plays a key role in supporting other manufacturing subsectors , both domestically and globally . It has a high degree of export orientation .
The manufacturing sector is highly fragmented , with SMEs dominating machinery and equipment production . There is also a high degree of fragmentation in the supply chains of large companies in food production equipment , packing equipment , construction equipment and metallurgical machinery .
“ The Italian metal fabrication equipment market is fragmented and highly competitive , where manufacturers are increasingly looking to embrace digital technology trends to automate fabricating processes . Continuous and rigorous innovation is therefore driving companies to improve their profit margins and sales turnovers across the world ,” concluded Mordor Intelligence .
Two key manufacturing exhibitions will be held in Milan this May : LAMIERA ( sheet metal machinery , systems and products ) from 10-13 May 2023 and Made in Steel ( the iron and steel production chain ) from 9-11 May 2023 . Visitors will be able to visit the two separate , but complementary , events on one business trip to the fieramilano Rho exhibition centre .
ISMR May 2023 | ismr . net | 45