In the first three months of 2017, exports from the 147 Italian industrial districts mapped by Intesa Sanpaolo picked up again, showing an increase at current prices of 6,4% over the first quarter of 2016. The levels of exports and the trade balance reached new quarterly records, rising respectively to 24,1 and 15,6 billion euro. The districts are confirmed as central to the Italian productive fabric: by themselves they represent around 80% of the trade surplus of the entire manufacturing industry.
The growth involved all district-intensive sectors and affected 112 of the 147 districts monitored. Such widespread growth has not been recorded since the third quarter of 2011. In the presence of a moderate acceleration in world trade, the Italian industrial districts have once again shown high reactivity, managing to seize the growth opportunities present on the markets, leveraging on the quality and diversification of productions and good integration into international supply chains . It is no coincidence that Italy is first in terms of contribution to the added value of the French fashion chain, abundantly preceding Germany and China, and in second place as a supplier of German metalworking, preceded slightly by China.
The engineering districts stand out in terms of growth intensity, thanks also to the recovery in production prices, especially in the more upstream phases of the production process. Metalli from Brescia, Mechatronics from Bari, Metalmechanics from Lecco, Packaging Machines from Bologna and Termomeccanica from Scaliger were particularly brilliant. These five districts alone achieved an increase in exports in absolute value equal to 412 million euros (+18%). Overall, all the Italian engineering districts achieved an increase of 11,3%, obtaining better results than the already excellent ones achieved by their German competitors (+7,7%).
The other typically district productions showed positive performances, with growth rates ranging between +3% in the districts that produce intermediate goods of the fashion system and +6,5% in the areas specialized in building products and materials. In particular, some of the main Italian districts returned to growth at sustained rates. These include the leather goods and footwear of Florence (+14,8% the trend variation), the first district for growth in absolute value of exports (+120 million euros), the goldsmith's shop of Valencia, the tiles of Sassuolo, the household appliances of the Inox Valley, the Furniture of Livenza and Quartier del Piave, the Taps and Valves of Cusio-Valsesia, the Textiles of Biella and the Wood-Furnishings of Brianza. In the agro-food sector, the desserts of Alba and Cuneo, the wines of the Langhe, Roero and Monferrato and the wines of the Verona area stood out, all with double-digit growth rates.
In this edition of the District Monitor, a particular focus is dedicated to the furniture and agro-food districts. The analysis of the evolution of furniture industry exports shows how foreign sales, after the 2009 crisis, followed a path of gradual recovery, reaching a peak in 2015 and then remaining substantially stable in 2016. At the district level, it emerges a high gap in the results obtained on foreign markets, with some districts already above pre-crisis levels in 2016 and others lagging behind. In particular, wood and furniture from Alto Adige, upholstered furniture from Forlì and wood furniture from Brianza stand out for their performance on foreign markets, followed by furniture from the Livenza and Piave district and furniture from the upper Tiber valley. The first quarter of the current year opened with an acceleration in export flows from the Italian furniture districts, which recorded a trend increase of 5,8%, three percentage points more than non- districts.
In the agro-food sector, 2017 opened positively for exports from the 47 districts monitored, which recorded a +4,1% trend, reaching 4,16 billion euros exported in the first quarter of the year ( 164,5 million euros more than in the first quarter of the previous year). The analysis of the performance of the individual supply chains returns a picture
Intesa Sanpaolo – Studies and Research Department 2
District monitors
July 2017
positive that extends to almost all sectors. Particularly good wines, meats and cured meats, the agricultural chain and that of pasta and desserts. The dairy sector remained in moderately negative territory, while the district sector that suffered the most at the beginning of 2017 is that of oil, which suffers from a very difficult 2016 agricultural year.
Puglia, Piedmont and Friuli-Venezia Giulia lead the regional classification by growth intensity of the district areas. Brilliant results were also obtained in Lombardy, Veneto and Tuscany, the first regions for the increase in absolute value of district exports. The Marches are more in difficulty, which are most likely still feeling the effects of the earthquake that hit these areas last August and are penalized by the restructuring underway in the hub of extractor hoods and household appliances in Fabriano.
The rediscovered vitality of the district areas can be explained by a widespread recovery of direct flows both in the traditional outlet markets (+5,7% the trend variation in the first quarter of 2017) and towards the new markets (+8%) which are recovering their role as an accelerator of world trade. Switzerland, Germany, Russia, Spain, France, China, the United States and Poland are the countries where district exports have grown the most in value. For the first time in a long time all the most important world markets show a positive sign, confirming that the recovery is solid.
Russia has returned to being the driving force: in the first three months of 2017, district exports to the federation increased by 28,2% in trend terms, thanks to an almost generalized growth that involved both districts historically not very present in this market (Inox Valley, Instrumental Mechanics of Varese, Metalworking of the lower Mantua), and districts already strongly active in the past, such as the Footwear of Fermo, the Clothing of Rimini and the Packaging Machinery of Bologna.
After the setback in 2016, the Chinese market then restarted, where district exports achieved an increase of 18,6%, driven by the districts of the home system (above all Wood-furniture from Brianza and Marble of Carrara), the eyewear shop of Belluno and various engineering districts.
In the first few months of 2017, positive signals also emerged for the export of Italian technological hubs, after the negative trend observed in the last three quarters of 2016. In fact, exports grew by 8,3% (change in trend at current prices), better than the data, however positive, of the traditional districts (+6,4%), settling on values equal to approximately 7,2 billion euro.
Exports were driven by the pharmaceutical sector, which showed a double-digit increase (+18,4%), thanks to the excellent results observed in all four centers monitored (pharmaceutical centers in Lazio, Naples, Lombardy and Tuscan). Biomedical (+9,7%) and ICT (+6,9%) also performed well, while the drop in the aeronautical sector continued, which closed the first quarter with a 19,4% decrease in exports.
The breakdown by outlet market shows a more intense rebound in sales on emerging markets (+19,6%) and a more contained increase (+5,3%) on advanced markets, which confirm themselves as the preferred destinations for exports of poles, receiving over 70% of the total flows. Despite the excellent performances observed in the United States and Ireland, the figure for flows to advanced countries was negatively affected by the sharp slowdown in sales in Belgium (discounting the evolution of the Lazio pharmaceutical hub).
In the second half of 2017, exports from industrial districts and technological poles will be able to continue to grow at sustained rates, in the presence of a favorable macroeconomic context and a non-penalizing exchange rate. Support for growth could also come from the domestic market, thanks to the good trend expected for consumption and investments. The environment is certainly favourable, thanks to the presence of significant government measures to support innovative investments and the availability of good financing conditions.
Attachments: Monitor of industrial districts July 2017 - Intesa Sanpaolo
