It continues to grow, albeit at a slower pace, the turnover of the industrial districts, which in 2023 recorded an increase of 0,8% at current prices, while export confirms the record levels reached in 2022, remaining steadily above 150 billion euros, driven by Mechanics and agri-food. Ltrade surplus instead it rose by 4,4 billion euros (+4,8%) and reached a new high of 94,3 billion euros. These are the main data that emerge from the sixteenth edition of Annual report on Industrial Districts created by the Research Department of Intesa San Paolo.
The research was presented today in Milan in the presence of the president of Intesa Sanpaolo, Professor Gian Maria Gros-Pietro, the chief economist Gregorio De Felice and the head of Industry & Local Economies Research Stefania Trenti.
Industrial districts: mechanics and agri-food boost turnover
After the leap recorded in the two-year period 2021-22, the turnover of the industrial districts in 2023 is estimated to increase by +0,8% at current prices, placing it well above the levels of 2019 (approximately +20% at current prices). “This is a decidedly positive performance and superior to that of non-district companies”, we read in the report which highlights how all sectors show higher turnover values compared to those of 2019.
In particular, what stands out are the districts specialized in mechanics and agri-food which also recorded good growth in turnover in 2023, thanks to the performances achieved on international markets (+7,9% and +4,5% export growth respectively).
Exports are confirmed at record levels
In 2023, district exports remained substantially stable (152,7 billion) confirming the record levels reached in 2022 when for the first time the quota of 150 billion euros exported was exceeded with momentum.” The districts have been able to overcome the weakness of the German market by seizing the growth opportunities present in other markets", explain the Intesa Sanpaolo experts. “This is further confirmation of the extraordinary ability and speed of adaptation of the district companies which stand out in the Italian panorama for their propensity to export and ability to create value in the territory”, they continue.
In the 2023, in fact, the trade surplus of the districts rose by another 4,4 billion euros (+4,8%), reaching the record share of 94,3 billion euros.
“Productivity is growing more than in the rest of Europe. Districts drive the positive aspects of change. The business logic of the last decade has been overcome. The entrepreneurial spirit has changed“, says Gian Maria Gros-Pietro, president of Intesa Sanpaolo.
The ranking of industrial districts
Goldsmiths from Valenza, agricultural machinery from Reggio Emilia and Modena, wines and spirits from Brescia, Gomma del Sebino, Bergamasco, Mechatronics from Trento. These are the five districts at the top of the ranking of the Intesa Sanpaolo Research Office which takes into account the best performances in terms of growth, profitability and capitalisation.
Industrial districts: turnover also growing in 2024 and 2025
Le expectations are also positive for the two-year period ongoing, with Intesa Sanpaolo economists predicting an increase in turnover at current prices of district companies equal to +1,1% in 2024 and +2% in 2025. Agri-food and mechanics still highlighted. “The first sector will be able to count on unexpressed growth potential on international markets. The second will benefit from the greater demand for investment goods activated by the digital and green transition", predict Intesa analysts, according to whom positive indications also come from profitability indicators which have shown good stability despite the energy crisis. Faced with a slight reduction in the ebitda margin, the ROI of district businesses has strengthened, thanks to a more efficient use of invested capital. On the income front, companies with self-produced energy systems were rewarded. 16,6% of high-margin companies in both 2019 and 2022 have a renewable energy plant, five percentage points more than other companies. These differences are significant in every company size and sector and are particularly pronounced among medium-sized companies, in the fashion system and in the metals supply chain.
Capitalization is also strengthened
The process of strengthening the capital of district companies continued: the net assets as a percentage of liabilities it rose above the 30% threshold in the districts, slightly higher than the values observed outside the districts. This percentage has doubled in twenty years (it was just under 16% in the three-year period 1998-2000).
The comparison between district businesses that have been active for more than twenty years and businesses that ceased operations after 2001 highlights how the greatest differences are observed above all in terms of the degree of capitalization which, in the four-year period 1998-2001, had risen to 22,2% in the former , approximately double compared to the latter. “This means that the increased capitalization of companies represents an important protection against the geo-political risks and turbulences present in the current macroeconomic scenario”, comment the analysts.
Green and digital transition are the drivers of investments
The survey conducted in November-December on the network of Intesa Sanpaolo managers shows a growth in investments by district companies aimed at making production processes more efficient and enhancing self-production of energy. Again according to the managers, the double green and digital transition is, and will be, the main driver of investments in Italy and in industrial districts; an important boost could come from the incentives in favor of the 5.0 transition, which overall provide around 13 billion euros in tax credits. A greater diffusion of digital in the production system can translate into an increase in the potential growth rate of our GDP. In fact, companies with 4.0 investments obtain important advantages in terms of both growth (+32,5% increase in turnover between 2019 and 2022, a double percentage compared to non-4.0 ones) and productivity (equal in 2022 at 76 thousand euros vs 60 thousand euros). A quarter of the district's businesses managed to contain the increase in bills to 4% in the five-year period 2019-2023.
As regards digital, despite the progress made in recent years, the diffusion of some technologies in district-intensive sectors is still low. In fact, if the share of Italian manufacturing companies that use cloud computing services is high (61,2% vs 46,3% on average for the European Union), the same cannot be said for data analysis (24,3% vs 27,4%), e-commerce (15,2% vs 20,8%) and artificial intelligence (4,9% vs 6,8%). Among the sectors with high district intensity, the food and drink sector stands out above all, highlighting a better positioning than the European average for data analysis and artificial intelligence and a limited gap in e-commerce. Greater delays emerge, however, for the Italian fashion system.
Many factors of uncertainty, but the Italian productive fabric can overcome them
The report offers an updated snapshot of the economic-profit situation of district businesses. What emerges is a comforting picture of the state of health of businesses, which is anything but obvious given the period of strong turbulence and uncertainty that has characterized recent years. Starting from 2020, companies have in fact found themselves facing a close succession of adverse events. The analyzes contained in the report show that the district companies were able to overcome and strengthen themselves firstly against Covid, with the blocking of production and the resulting supply difficulties, and subsequently the war in Ukraine which brought strong increases in energy prices and critical issues in the supplies of some raw materials imported from countries affected by the conflict. In this context, Italian cumulative growth between 2021 and 2024 is equal to +5,7% against +3,3% in the euro area, 3,9% in France and 1,5% in Germany . Among the large countries, only Spain did better, with +10,2%.
However, the geo-political picture deteriorated further at the end of 2023, when, again at the gates of Europe, a new war began between Israel and Hamas which, like the one in Ukraine, is still ongoing. Among the elements of uncertainty that characterize the current scenario are also the upcoming elections in Europe and the United States.
“The Italian productive fabric has the resources to face this complex phase”, we read in the report, which highlights above all the “powerful process of strategic repositioning” which has seen Italian investments in machinery, means of transport and ICT grow by 29,3 % between 2016 and 2023 at constant prices and, at the same time, significantly increase the level of capitalization of companies. “This allows us to look with optimism at the recovery which we expect to start in the second part of 2024 and intensify during 2025 when the effects of the return of inflation, the cut in interest rates and the boost from PNRR funds will have unfolded ”, declare Intesa Sanpaolo economists.
De Felice: “Improvement in the economic situation in 2024, the rate cut will start from the ECB”
“There is a lot of uncertainty and a very tense situation in the Middle East” but, despite this, it is expected “an economic improvement during this year, with a better second half than the first, with higher growth rates through 2025,” he says. Gregorio De Felice, chief economist of Intesa Sanpaolo. “Trade flows that had been weaker in 2023 show signs of recovery and the data are better than expected both in the US and in the Eurozone where the minimum point has been reached. China is improving." The story of the Iranian missiles against Israel “does not explicitly imply Iran's involvement in the conflict: it is a symbolic action in response to the Israeli attack on the Iranian embassy. For De Felice, "the key point is that the international community convinces Israel to limit possible counter-reactions."
Inflation is decreasing, albeit still with volatility during the year, around the 2% threshold. We believe this time the reduction in rates will begin with the ECB rather than by the USA: the forecast is for a drop in interest rates already with the next meeting on 6 June, which will be followed by three more during 2025", continued De Felice, underlining that "In the USA it is believed that it is a postponement of the start of the cycle of rate cuts to July or September is possible”. However, “we're not seeing any 'soft landing' actually, no landing, they're proceeding upwards.”
