If the Milan model slows down, what happens to the Italy model, already bringing up the rear in the estimates of the growth levels of the European economies? “The Lombardy region is a reference in Italy and has a strong hold abroad, just think of the foreign investment companies that open their offices in the Lombard capital. The Milan model was the method that made it possible to achieve a series of good results, but it is useful for providing a method, one must not rest on one's laurels. Uncertainty weighs heavily, and it weighs above all on our region because it is much more exposed than the others”, commented Giuseppe Sopranzetti, director of the Milan office of the Bank of Italy, during the presentation of the economic update on the results of the Lombardy region.
According to the data presented this morning, November 19, in Milan the train of the Lombard economy recorded a progressive slowdown. If since the end of 2014 the regional economy had restarted after facing one of the worst crises in recent decades, significantly increasing the pace of growth between the end of 2017 and the beginning of 2018, in the first nine months of this year the performance they started to brake again. This is due to a series of variables which underlie the slowdown which impacts the entire world economy: it is theglobal economic uncertainty and low consumer, investor and producer confidence. Not only an Italian problem, even if the peninsula is the state that has to recover the most, since it has been growing less than its other competitors for at least a quarter of a century, says Sopranzetti.
The Lombardy region does better than all the others in Italy, with the exception of exports, which after two years of sustained growth fell by 0,6% compared to 2018, when exports grew by 5,6%.
Data in hand, the report prepared by the Bank of Italy shows a weakening of the manufacturing, a sector in which production remained substantially unchanged in the first nine months of the year, stopping at +0,3%, while last year on an annual basis it grew by +3%. The consequence of this stagnation was the decrease in exports and investments. Of the sectors in which production activity increased, the food sector showed the most lively dynamics, growing by 2,8%.
In general, in a stagnant and uncertain economic situation, investments remain stagnant and are expected to remain so in 2020, all other things being equal.
A note of color in the general framework of the Lombard economy is the labor market. In the first part of 2019, despite the weakness of the economic activity, the expansion of employment continued and, therefore, the reduction of the unemployment rate. The number of employed people in the first months of the year increased by 1,2% compared to the same period of 2018, while the employment rate rose to 68,4%.
The current levels of uncertainty in the world economy are among the highest in the last twenty years due to Brexit, the economic crises that have affected emerging countries such as Argentina and Mexico, the geopolitical crises, the trade war, and the economic slowdown German. According to Sopranzetti, in order to get the economy going, it is necessary to fill a gap with respect to pre-crisis levels. Therefore, what to do?
Probably the solution, according to Bankitalia, is to find everyone in their own sector, basing the regrowth on their own strengths: manufacturing, universities, national talents, the financial sector, eco-sustainable indicators. "If the fuel returns, that is trust, the foundations from which to start building again are good", concluded Sopranzetti.
