In the increasingly heated global competition, the Italian companies have shown that they know how to keep up with the German companies on foreign markets: in the last four years theirs export it grew by 3,0% annually, against 3,5%.
To keep up with the comparison, they have been able to direct sales towards the most dynamic countries, so much so that Italian potential demand rose by an annual average of 4,1% between 2000 and 2014, against +4,2% for Germany.
They have increased the quality of the products: +25,0% the increase in the same period of the indicator elaborated by CSC, against +13,3%. They contained the increase in price lists: +2,0% per year, against +1,8%. And they have increasingly held positions upstream along global value chains, while Germany, by contrast, has specialized downstream. Together, these forces have offered a positive contribution of 4,9 percentage points per year to the dynamics of Italian exports.
At the same time, they pushed some factors in the opposite direction. In particular, theULC increase (unit labor cost): +3,0 percentage points per year, compared to the German -0,1 (for Germany the data are unchanged at 2013).
Today, a series of elements offer an opportunity for recovery: the devaluation of the euro and the collapse of oil prices, which increase Italian price and cost competitiveness and flesh out the margins of companies; and low long-term rates, which reduce financing costs. Greater margins and lower cost of money will fuel new investments and, therefore, future productivity gains.
It is necessary to capitalize on the advantages deriving from these factors by continuing along the path of structural reforms, with the completion of those of the labor market and public administration.
Attachments: CSC Note n.6-2015_Competitivity.pdf
