The XXVIII were presented yesterday in Rome ICE export report 2013-14 "Italy in the international economy" and the2014 ISTAT-ICE Yearbook “Foreign trade and international business activities”.
Divided into seven chapters that provide an overview of the geographical and sectoral structure and the dynamics of Italy's foreign trade and internationalization in relation to that of other countries, the ICE Report is enriched by graphs and tables and contains brief boxes and monographic insights on the most current topics. A special chapter examines the methods of internationalization of Italian companies. For many years, the Report has been an important appointment not only for insiders, but also for all those who seek to understand how the presence of our companies on international markets is changing.
According to the analysis of the ICE the growth of the world economy, after the slowdown in 2013, should gradually strengthen during this year and in 2015. However, they remain many uncertainties, linked to the volatility of the financial markets, the presence of macroeconomic imbalances and growing geo-political tensions.
Signals of improvement come from advanced economies, where a 1,8% increase in GDP is forecast for the current year. Among developed countries, the United States should grow at a rate of 1,7% on an annual basis, despite the contraction recorded in the first quarter of 2014. The negative cycle in the Eurozone, which began at the end of 2011, should end and GDP should expand by 1,1%.
I emerging and developing countries, which now produce more than half of the world's product, are confirmed asmore dynamic area, with a growth of 4,6%, however lower than the pace of recent years due to the slowdown in the dynamics of investments and raw material prices. The two main countries, China and India, which alone account for more than 20 per cent of world GDP, should register different trends: against an acceleration of Indian GDP (+5,4%), China should experience a slowdown, with an expansion rate of 7,4%, lower than the average of the previous decade. Una quite sustained growth is expected for Africa and the Middle East (respectively 5,4 and 3,1%), while the escalation of tensions in Ukraine negatively affected Russia's growth prospects (0,2%, more than one percentage point less than the April forecast).
The albeit modest economic recovery, together with a favorable trend in raw material prices, should stimulate a faster growth of trade in goods and services (equal to 4% in 2014 and 5,3% in 2015) albeit at lower rates than in previous expansionary phases.
The ranking of the top twenty commodity exporters does not show significant changes, China confirmed its first place, with a share of 11,8%, a slight increase compared to previous years. The only significant change concerns the United Kingdom, which moved from eleventh position in 2012 to eighth in 2013. Italy, which was in ninth position, fell back to eleventh.
In 2013, world exports of services grew more than those of goods, at a rate of 5,5% in value.
The exchange of goods and services and the various forms of international production are increasingly interdependent: the majority of world trade (80 per cent, according to Unctad estimates) takes place within international production networks (also called global value chains ), consisting of multinational enterprises, their affiliates and various suppliers of intermediate goods and production services located in different countries. This makes them much more integrated economies, but also more vulnerable to economic shocks.
Foreign direct investment (FDI), which has been booming since the mid-XNUMXs, represents a central element in global production networks, both in the manufacturing sector and in services, where they showed high growth before the crisis. In 2013, global FDI inflows increased by 9 percent, while still remaining below the values achieved before the crisis.
The first signs of economic recovery emerged in the European Union in 2013, essentially driven by net exports. In the coming months the GDP growth is expected in slight acceleration (1,6% in 2014 and 1,8 in 2015), with a greater contribution from domestic demand. During the crisis, the incidence of the European Union on world imports decreased significantly: reflecting the weakness of domestic demand and the drop in raw material prices, it went from 38 to 31% between 2008 and 2013.
As for our country, the volume of Italian gross domestic product contracted by 1,9 per cent in 2013, returning to a level comparable to that of 2000. The fall is essentially due to the further reduction in consumption and investments, caused by the continuing compression of available income, by the worsening of household and business confidence and by persistent difficulties in accessing the credit market. The recovery, which began in the second half of the year, appears slow and fragile. Domestic demand, while showing some signs of recovery, remains weak and the main support for growth continues to depend on net exports, conditioned by the uncertainties of the international scenario. According to the latest estimates by the Bank of Italy, GDP could grow by 0,2% in 2014 and by 1,3% next year.
On the strong improvement in the current balance of payments, which after thirteen years has recorded a positive sign (15 billion euros, equal to about 1% of the gross domestic product) influenced the recession: as at other times in the past, the rebalancing of external accounts is affected by a decrease in imports, rather than a particularly favorable trend in exports (still in 2013 at -0,1%). In the last two years, marked by an overall reduction in GDP of 4,2%, imports of goods and services fell by 9,6%, while exports increased by 2,3%, below the average growth of those of the Eurozone countries (3,7%), feeling the effects of a relatively more concentrated geographical orientation towards slow-growing markets.
Current assets in 2013 were mainly generated by trade in goods, the surplus of which reached 37 billion euro, up by 20 billion compared to 2012, but the balance of services also contributed. The deficit in energy products narrowed by about 9 billion, reflecting the decline in their dollar quotations, the appreciation of the euro and the decline in demand. The manufacturing surplus increased further, exceeding 98 billion. In various important sectors and in numerous products, the positive balances of Italian foreign trade have reached considerable dimensions, also compared to the other main European countries, not only due to the effect of the fall in imports, but also due to the results achieved by exports.
Contrary to what happened in the previous year, in 2013 the FDI, both incoming and outgoing, grew. Italian investments abroad increased from 6 billion to almost 24, thanks to the component of intra-company loans. Foreign investments in Italy have gone from almost zero to around 12 billion, equal to just over 1% of FDI flows into the world.
Even in terms of stocks, the Italian share, equal to 1,6% of the world total, appears much lower than the country's economic potential, eloquently demonstrating its scarce attractiveness. They contribute to it structural factors that for a long time time penalize our economic system. The weight and the delay in responding to the bureaucracy, the complexity and opacity of the legislation and the slow access to justice, among others, discourage potential foreign investors. To these has been added in the last two years the strong recession, which has decimated the production capacity of our industry and reduced domestic demand.
Italy has followed, albeit with delay, the trends of international trade, progressively redirecting its exports to distant markets. Thus, parallel to a reduction in the weight of the European Union, still the first commercial partner, which still receives more than 50% of Italian exports, the incidence of areas that are less close but more dynamic has increased, such as East Asia , Africa and the Americas.
Some significant changes can be noted in the model of international specialization of Italian industry. Compared to the beginning of the XNUMXs and also in the five-year period
of the crisis, yes they are further attenuated the comparative advantages in all the traditional sectors, and in particular in the fashion system. At the same time we note a further strengthening of the specialization in mechanics and a slight recovery in sectors with strong economies of scale and high research intensity, which represent the main element of divergence of the Italian model compared to the major industrial countries.
The forecasts of the Bank of Italy for 2014 indicate an increase in the current balance of payments surplus, with growth in exports of goods and services (3,4 per cent) higher than that of imports (1,7 per cent). The foreign demand therefore stay decisive for the support of economic activity and employment, especially in industry. In the two years preceding the start of the great crisis, the number of employees in exporting manufacturing companies had grown at an average rate of 0,6 per cent, while in companies operating only on the domestic market it had fallen by 2,2 per cent year. The two waves of crises that have followed one another in the last five years have caused a drastic drop in employment throughout the industrial system, but exporting companies have suffered less severe losses than those that operate only on the domestic market.
The solution to our country's systemic crisis can only consist in the search for product innovations, capable of successfully establishing themselves in the consumption patterns of the middle classes, especially in emerging countries. They also matter a lot process innovations, not only the technological ones, but also the organizational ones, which include the strategic choices necessary to oversee the distribution channels, diversify the outlet markets, enter the international production networks that are reorganizing the division of labor on a global scale.
For this purpose, the system of public support for the internationalization of enterprises, which not only has the function of reducing the costs of access to foreign markets for small and medium-sized enterprises that use its services, but also that of generating indirect benefits for the entire production system, provided that its activities are subjected to rigorous procedures control and evaluation of results.
They are also needed effective measures to attract foreign investment, reducing what appears to be the most serious limitation of the model of international openness of the Italian economy. A greater presence of foreign multinationals, in addition to generating direct benefits in terms of the contribution of capital and skills, could favor the participation of Italian companies in international production networks, which have proved to be the keystone for the development of international trade.
