Intesa Sanpaolo e Promethea they presented the new Industry Sector Analysis Report for October 2024. The study highlights the growth forecasts of the Italian manufacturing sector, the market dynamics expected for the next two years and the challenges related to the digital and environmental transitions.
Over the next two years, the Italian manufacturing will start growing again, supported by falling inflation and interest rates, with an annual growth rate of 1,1% and a recovery in exports, expected to grow above 2% per year. The export will benefit from a specialized and niche offering, with an expected trade balance of over 124 billion euros by 2026. The internal market, although uncertain in 2024, will see a recovery in consumption and investments thanks to Transition 5.0 and the PNRR. Italian companies They will also enjoy solid self-financing conditions, with increasing margins and a growing share of highly profitable companies. leading sectors will be electrical engineering, consumer goods and pharmaceuticals, while the intermediate goods sector will face challenges, especially in the automotive and construction sectors, the latter slowing slightly after years of strong demand.
Manufacturing sector grows again
After a 2024 characterized by uncertainties and a -0,9% drop in turnover at constant prices, the Italian manufacturing is set to recover ground over the next two years. With inflation stabilizing and interest rate reductions, demand conditions will improve, both domestically and internationally. Annual growth in the manufacturing sector is expected at 1,1% on average, while exports of Italian manufactured goods could grow by more than 2% per year, bringing the trade balance to over 124 billion euros by 2026.
Growth prospects of the domestic market
Il internal market, despite an uncertain 2024, shows positive signs for a recovery starting from 2025. The recovery in consumption will be encouraged by theincrease in employment and contract renewals, while investments will be supported by the Transition 5.0 plan and the implementation of the PNRR. The Italian industry enjoys solid foundations, with an Ebitda margin that exceeded 11% in 2023, thanks to energy efficiency policies that have reduced costs.
The resilience of Italian manufacturing
Il 2023 budget confirms the solidity of the Italian manufacturing sector, with an improvement in profitability and self-financing capacity. Approximately 46% of companies recorded a Superior King at 10%, an increase compared to 32% in 2020, a sign of widespread financial strength. Energy efficiency and the adoption of new technologies have contributed to improving margins, making the Italian industry more resilient to market turbulence.
In 2024 only export-oriented sectors will grow
In 2024, only the export-oriented sectors and less sensitive to economic cycles will experience significant growth: Pharmaceuticals and Consumer Goods will see increases above 4%, while Food and Beverages will grow modestly (+0,8%). Among capital goods, Electrical engineering will be the only dynamic sector (+1,8%), thanks to investments in the energy transition. Intermediate goods sectors such as Chemical intermediates (+1,5%) and Metallurgy (+0,9%) will see a recovery. Mechanical and Electronics, on the other hand, will suffer drops in turnover (-1,6% and -2,9%). The construction supply chain will normalize, with modest increases in Construction products (+0,3%) and drops in Furniture (-1,5%) and Household appliances (-0,6%). The Fashion System (-5,5%) and the Automotive and Motorcycles sector (-6,6%) will face difficulties due to weak consumption and the transition to electric.
Expectations for the next two-year period 2025-2026
In the two-year period 2025-26, the most competitive sectors for exports and able to adapt to the ddigital and environmental transitions will drive growth. Mechanics and Electronics will see a recovery in turnover (+2,5% and +2,3% annual average), together with Electrical Engineering (+3,3%). The Consumer Goods (+2,7%), Pharmaceuticals (+2,6%) and Food and Beverage (+1,1%) sectors will benefit from foreign markets and will exceed 2019 levels, both in terms of turnover and profitability. Motor vehicles and motorcycles, on the other hand, will continue to deal with a difficult transition and weak domestic demand.
The outlook for the Construction related sectors in the two-year period 2025-26 are less favorable, after the boom of the previous years. The Products and materials to be cobstruction will see a drop in turnover (-2,4% annual average), and the reduction in orders in the renovation segment will also affect the producers of Furniture (+0,7%) and Household Appliances, with limited growth. The producers of intermediate goods (Metallurgy, Chemical intermediates, Other intermediates, Metal products) will benefit from the cyclical recovery, but with a less strong drive from construction and automotive. slowdown in renovations, after the peak of the 110% Superbonus, will lead to a normalization of margins, which, however, have seen an improvement for some sectors (such as Electrical Engineering and Chemical Intermediates) between 2019 and 2023.
Future Challenges: Geopolitical Uncertainty and the Automotive Transition
Despite the resilience of manufacturing, the Intesa-Prometeia report underlines that the international context will remain complex and dominated by geopolitical risks. The weakness of German demand and the automotive crisis are among the main challenges for the Italian industrial sector. In particular, exports to Germany have suffered a significant decline, with a negative impact on sectors such as automotive (-19% in the first seven months of 2024) and metallurgy.
