Another hard blow for Italian companies. The costs of energy, of raw materials, the difficulties in procurement, in exports and in payments are the effects further aggravated by the war in Ukraine which put Italian production at risk. If for the moment only a third is able to maintain the activity unchanged for extended periods, for two thirds the management of difficulties has a time limit: in fact, one company out of four (27%) assumes that it can continue produce without interruption only in the short term, i.e. still for 1-3 months, and a further 32% no later than 12 months. A worrying study by the Assolombarda Study Center on a sample of 463 companies in the territories of Milan, Monza and Brianza, Lodi and Pavia, mainly manufacturing and with direct commercial relations with Russia-Ukraine-Belarus.
According to the study, due to the conflict, 9 out of 10 companies consider energy price increases a "major" problem and 8 out of 10 the price increases of other commodities. 72,6% of the companies highlight the problems in the procurement of raw materials and, for half of the companies, the cost and the procurement of semi-finished products weigh, while over a third of the companies also report obstacles to exports and difficulties in payments .
Difficulties in procurement, export and payments
The steel it is by far the raw material with respect to which both cost problems (for 47,5% of companies) and supply problems (for 35,4%) are most felt. Among other raw materials the situation is critical for: copper, nickel, zinc and iron ore among metals, urea and ammonium phosphate among i fertilizers, corn, soybean oil, wheat and palm oil among others agriculturaland cotton.
The increase in costs and procurement difficulties have a direct impact on business activity and almost 60 businesses in Milan, Lodi, Monza Brianza and Pavia report that they have already reduced production, most of which by up to 20%. but with a non-negligible share of up to 40%.
The search for alternative supply markets, highlighted by the study, demonstrates the companies' ability to react to this emergency. It is an ongoing phenomenon that defines a medium and long-term strategy for the reorganization of the geographies of the global value chains. In fact, excluding realities with a direct exchange Russia-Ukraine-Belarus, as much as 48,1% of companies are looking for new supply markets. After China, which represents the first market, among the alternative ones, Europe emerges for the supply of semi-finished products, closely followed by Italy (for 18,9% of the companies), then the Germany (13,0%), the Use (10,9%) and the Turkey (10,1%).
As far as prices are concerned, the high energy price is having an impact on the skyrocketing production costs. and consequently also on product prices: 84% of companies revised their sales prices.
In this context, finally, a clear deterioration emerges in the confidence index which in Lombardy and in the North-West from February to March went from 116,5 to 103,3 for consumers and from 111,9 to 110,2 for manufacturing enterprises. A smaller decline, the latter, due for the moment to current orders which are still high, but the significant deterioration to the lows since the beginning of 2021 of short-term expectations both on demand and on production is worrying.
Spada (Assolombarda): "Important and urgent measures are needed"
Based on the evidence elaborated by the Centro Studi, Alessandro Spada, president of Assolombarda underlines the need for "important and urgent measures" to support companies that find themselves in difficulty in producing. "For example, any intervention aimed at lowering the final price of gas for the corporate consumer can represent a benefit: the introduction of the percentage price cap, as well as the creation of a European gas purchasing centre”, added the number one of Assolombarda.
For President Spada, however, a positive factor emerges from the study, which involves the reorganization of the geography of global value chains. "In many cases, in fact, a rapprochement with Europe and Italy is taking place: this can certainly represent an opportunity for the more competitive parts of our industrial system".
