After a second quarter in recovery, the optimistic - pessimistic balances for production, orders and profitability stand at negative values, while the businesses of Piedmontese companies return to being prudent for the third quarter of 2024. This is what emerges from the usual quarterly survey, created in June by Turin Industrial Union e Confindustria Piedmont, collecting the evaluations of over 1.300 manufacturing and service companies.
Forecasts for the third quarter of 2024
Forecasts for the markets are also trending downwards exporti, while the size gap is reversed with larger companies expressing less positive expectations compared to smaller ones. “However, it should be noted that the overall Piedmontese data is the synthesis of a divergent sectoral trend. On the one hand, the manufacturing sector is suffering, with decreasing indicators and increasing layoffs, especially in some sectors. On the other, a tertiary sector that continues the growth that began after the pandemic and seems not to be affected by the tensions on international markets", explains the survey.
Overall they remain positive investments, plant utilization rate and payment times, the order book varies little. Increases the use of social safety nets, especially in industry, which still remains at historically low levels.
A sectoral level however, in industry there are different trends. The optimistic - pessimistic balances are below the regional average for textiles, metalworking, rubber, plastic, chemicals and various manufacturing (jewelry, toys, etc.). Food, paper-graphics, wood and construction remain positive. Finally, in the tertiary sector all sectors express favorable expectations; in particular ICT, business services and transport.
“It is clear that the uncertainties linked to the various elections just concluded are weighing on the forecasts for this third quarter, on the one hand, but above all the slowdown in industrial production in both France and Germany. And since these are our two main trading partners, the effect on our exports and above all on the supply chains in which they operate is immediate", analyzes Andrea Amalberto, President of Confindustria Piemonte.
“From the results of our survey it clearly emerges how realistic our companies are and therefore well aware that even in the coming months the economic situation not only in our territory, but worldwide will have to go through strong turbulence, despite some positive signs such as the partial decline in inflation . I would like to reiterate that the way out of crisis situations can and must be found thanks to close cooperation and continuous dialogue between the economic-industrial world and strong and authoritative public institutionsthere, at every level,” he comments Giorgio Marsiaj, President of the Turin Industrial Union.
The forecasts of Piedmontese industries
Turning to Piedmont, for the three months from July to September, the forecasts are affected by theGlobal economic and political uncertainty: 18,6% of companies expect an increase in activity levels, compared to 18,8% who expect a decrease. The optimists-pessimists balance is -0,1% (it was 7,7% in March). Same trend for expectations on orders (balance of -1,1%).
Positive expectations for theoccupation, with 16,3% of companies predicting an increase, 9,0% predicting a reduction and an optimistic-pessimist balance of +7,3% (it was 11,6% in the last survey).
As in the last 5 quarters, expectations on the export (optimistic-pessimistic balance equal to -7,2%), while the level of investments remains good (25,9% against 24,1% in March). There was a slight increase in the use of layoffs, used by 10,4% of companies. The rate of use of plants and resources is stable, returning to the long-term average values (78%). The decline in exports has a negative impact on the expectations of large companies, reversing the traditional gap compared to companies under 50 employees, who are generally more cautious. In the June survey, in fact, large companies recorded a negative balance (-3,0%), while small companies expressed more favorable expectations (+1,2%).
A territorial level, positive expectations are observed for most of the provinces. They are higher than the regional average for Verbania (+19,4%), Cuneo (+7,2%), Novara (+4,0%), Canavese (+3,3%), Turin (+3,1%) and Alessandria (+2,4%). In difficulty, with negative balances, Biella (-23,8%), Vercelli (-13,6%) and Asti (-11,1%).
A sectoral level, the most significant decline concerns: textiles-clothing (-32,2%), in crisis for 5 quarters, rubber-plastics, which records a balance of -9,8%, chemicals (-6,1%) and various manufacturing (jewelry, toys, etc.), with a balance of -5,9%. Negative sign also for metalworking (-12,0%), especially automotive (-31,1%), metallurgy (-15,9%), mechatronics (-11,8%). Good performance for food (+6,5%), construction and plant engineering (+6,1%), paper - graphics (+16,7%) and wood (+15,8%%).
Turin confirms itself above the regional average
In June 2024 the indications of the Turin companies are again, overall, more favourablecompared to those of the entire Piedmontese sample. Expectations for employment, orders and production are still positive even if, differentiating by sector, we observe a dichotomy between an expanding tertiary sector and a still settling manufacturing sector, after a 2023 of uncertainty.
As for Piedmont, export forecasts remain negative, with trade made difficult by the slowdown of the German economy and the ongoing trade wars between USA, China and Europe. The use of redundancy payments remains limited: increasing in industry, but still below the historical average. The rate of use of resources varies little. As expected, investments slow down slightly, after the increase recorded in March. About a third of companies have orders guaranteed for more than 6 months. Profitability remains good, especially in the tertiary sector, similarly to what has been observed at a regional level.
Speaking in percentage terms, for the third quarter of 2024 20,5% of Turin companies expect a increased production, against the 17,5% who expect a decrease: the balance, equal to +3,1%, remains positive, although down by more than 11 percentage points compared to the March survey. Comparing the situation with that of Piedmont, where the balance is almost zero, Turin shows an advantage of 3 points. A similar trend is observed for orders, with a balance of 5,4%, down by more than 7 points compared to the last survey.
Expectations are positive'occupation, which recorded a balance of +9,0%. The propensity to invest varies little, with 22,2% of companies with significant spending plans. This share is more than 3 points lower than the Piedmontese average. The use of redundancy payments is increasing, affecting 9,3% of companies (14,7% in industry). The rate of use of plants and resources remained unchanged (79%), which remains at the long-term average values. As at a regional level, the capital recorded a decline in exports (-9,4% balance between optimists and pessimists). The traditional gap between medium-large companies (over 50 employees) and smaller companies (under 50 employees) is reversed, with production expectations of -2,0% and +5,8% respectively for the next quarter .
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