Contrary to expectations in the first months of 2018, the modest recovery of the Italian construction sector has not materialised. atradius underlines how, on the contrary, this year the sector is going through one of the most difficult periods since the economic crisis of 2008, due to the weakness of demand and the contraction of profit margins. In 2017, investments in the residential construction sector remained more than 60% lower than in 2008 and this decline was not compensated by the 20% increase in renovation works, mainly based on public investments. Investments in new residential buildings grew by only 2018% in 2 e the number of unsold new homes continues to total 1,4 million units. While investment in commercial construction has shown a modest recovery since 2016 (see shopping malls and industrial plants which grew by about 2% in 2017 and 2018), the outlook for 2019 is held back by the contraction of GDP growth and growing economic uncertainty. And although the number of public contracts grew by 33% in 2018, financial coverage could be a problem given the growing uncertainty about spending capacities in the short to medium term.
In fact, in addition to the still limited spending capacity, the still unfavorable credit conditions of the banks continue to represent the main reason for the weak performance of the construction industry, to which must be added the fact that many Italian companies in the sector are highly indebted. Last year, the value of new loans granted to construction companies fell by 12% compared to the previous year, the worst figure for the entire Italian industrial sector. Larger construction companies have turned to alternative sources of liquidity, including bonds, which have much higher borrowing costs than bank loans and low operating margins.
Contrary to the Italian situation, the Dutch construction sector continued to grow in 2018, in line with the general economic performance of the country. Construction gross value added increased by more than 5% year-over-year: in the third quarter of 2018, sales in civil construction and utilities grew by more than 11%, while infrastructure recorded an increase by more than 6%. At the end of last year, the Netherlands had around 174.000 registered construction companies, of which 148.000 were sole proprietorships and 26.000 had between 2 and 250 employees. Only 55 of the largest operators employ over 250 people and payments take an average of 60-90 days. Hence, the growth prospects for 2019 are confirmed to be generally positive and residential construction should grow by 5%. The infrastructure sub-sector is expected to benefit from the increase in the number of government projects over the next two years.
Coming toExport Italy, as reported by SACE, after the excellent performance recorded in 2017 (+7,6%), 2018 closed with an increase in Italian exports of 3% for an amount of 463 billion euros, while almost sales volumes stationary. This is a result lower than expected, which is affected by both slowdown of the main partners trade of Italy and of the less dynamic international trade.
In this scenario, the EU markets drove sales with excellent performances in the Czech Republic (+6,9%) and Poland (+5,9%) and a good performance in France (+4,5%) and Germany ( +3,6%). The trend weakened in non-EU markets (+1,7%) and in the United Kingdom (+1,1%), with negative values in China (due to the sharp decline recorded by the automotive sector), the Middle East, Mercosur and Russia. Despite this, theIndia was among the best markets in 2018 for Italian exports (+11%), with excellent performances in chemical-pharmaceutical and metallurgy. The latter sector, together with chemicals and furnishings, also supported sales on the American market (+5%). Exports of intermediate goods increased at the fastest rate (+4,3%), followed by those of consumer goods (+2,7%). Among the latter, non-durables are those that have shown the greatest dynamism (+3,1%), while the increase in durables was 1,3%. Lastly, foreign sales of capital goods increased by 1,5%.
Despite the construction debacle, the Made in Italy during 2018 found other points of support, such as, for example, in electronics (+7,2%): in fact, strong increases in Made in Italy have been recorded here, even in those markets where, overall, exports have decreased, such as Russia and OPEC. Another sector that closed the year with an excellent performance is metallurgy (+5,7%), thanks to the driving force of Austria, Germany and Japan. Above-average increases also for pharmaceuticals (+8%), means of transport (+6,3%) and textile-clothing (+20% in China, +10% in India): outstanding performances in China, France and Poland. On the other hand, the sales of motor vehicles and agricultural products were bad.
