The usual appointment of the Economic Observatory of the Business Economists Group was held in Rome last week at the Sace SpA headquarters: the conclusions are unanimous, there is no recovery and very few are the elements that suggest its realization.
The industry is struggling and all sectors denounce a continuation of the crisis without precedent for intensity and duration. The stability of the industrial system as a whole is beginning to be severely tested. Whole sectors are reorganizing themselves not only aiming at ever more distant markets to place their products but also profoundly modifying the production cycles, the allocation and location of the production phases, the production method. What is expected for the years to come no longer has to do only with coping with an economic crisis but with a real transformation of the productive fabric which, having to face the longest phase of recession since the post-war period, must rethink and reorganize itself.
The sectors further downstream and more exposed to internal demand, such as household appliances, are confronted with a demand that has returned to the levels of 25 years ago in all the peripheral countries of Europe and with a demand from the "core Europe" countries which it is so strong that it can balance the fall. Faced with these figures and with a consumption model that is radically changing, the industry can no longer postpone a radical rethinking of production strategies. They hold, and it is no coincidence, only the most technologically advanced sectors, such as "hobs".
All sectors are suffering, from chemistry, electronics, iron and steel, telecommunications, historically unpublished, and the more well-known construction, with cement consumption now back to the levels of 50 years ago.
The contractions of the first part of the year continue to show significant declines, also due in part to the slowdown of the German market, one of our main and traditional outlet markets also as a triangulation of goods directed overseas. Market niches are also starting to suffer, which up until 2012 had shown greater resilience, testifying that the persistence of the crisis is overwhelming both traditionally acyclical sectors, food and telecommunications, which are declining in real terms, both in the consumer and business components, and excellence that blame the decline of the European markets and, albeit to a much lesser extent, some slowdown in world trade. Equally worrying is the consumption of electricity, a traditional indicator that anticipates the trend of the economic cycle, which continues to record a marked contraction in the first 5 months of the year and also in the first days of June, clearly worsening even compared to 2012. The same trend is recorded in the number of bankruptcies, accelerating compared to 2012, and even more so in the liquidation of performing companies that choose to avoid a challenge that they consider to have too uncertain outcomes.
However, some sectors show holdings of investments in products and innovation, necessary to remain on distant international markets, in particular the Far East and closer ones with a high spending capacity, such as the Middle East for example.
However, the crisis of the domestic market, primarily Italian, but also European, requires a rethinking of the entire production and commercial strategy. The physical places of production lose their importance, except for the scale and proximity to a large pool of consumers, the brand strategy moves towards the agglomeration and identification of a single brand, quality becomes an essential requirement and not distinctive. Safeguarding the presence of supply chains at European level means facing the crisis for what it is: a crisis of demand.
Rekindling European demand is therefore the only way to safeguard productions with a higher technological content. If we do not act with determination and quickly, we risk not only losing the most standardized productions, but also impoverishing the possibility of companies to safeguard their technologically excellent products and those most competitive on international markets. Trend common to many sectors, especially those that are more concentrated on domestic and European demand.
If, up until 6 months ago, business economists agreed in indicating exports as the way out of the crisis, today, even if they still are, they underline how the lack of growth in the Old Continent is starting to penalize not only sectors and more traditional and more domestic but also negatively affects the ability to finance the necessary investments in product, organizational and governance innovation, necessary to compete on foreign markets. Not addressing the domestic problem could end up hurting exports as well.
Alessandra Lanza, President of the Business Economists Group and Head of Industrial and Territorial Strategies of Prometeia underlines "we have now reached a critical turning point for Italian industry, a moment in which it is necessary to decide without fail if you want to continue playing the industrial game, acting immediately to curb the demand crisis, or we are satisfied with playing an increasingly marginal role in global supply chains. Restarting demand is a sine qua non to then be able to concentrate on those investments that are so necessary to fill several years of technological delay. The distance with the large industrialized countries is rapidly widening, think of the recovery of competitiveness operated by the United States with shale gas and fracking, and the new technological, digital and 3D manufacturing revolution, which only a year ago seemed futuristic, today it begins to become reality. It is a revolution that seems tailor-made for a country that cannot count on economies of scale like Italy, both in terms of territorial and demographic structure and in terms of the composition of the industrial fabric, and which ignoring it can mean losing industrial primacy forever which despite such adverse conditions in many productions is still today, perhaps for a short time, a reality.”
