THEbusiness survey conducted by Turin Industrial Union e Confindustria Piedmont in the month of June he notes a cautious attitude in the forecasts of Piedmontese companies for the third quarter of the year. Compared to March, when there was an improvement in confidence, there is now one decrease in expectations, mainly due to the significant slowdown in the manufacturing sector, even if the service sector shows an improvement.
Despite this, the final indicators remain solid, confirming that we are not close to a negative turn in the economic cycle. L'use of the Redundancy Fund (CIG) falls below 6% and in the services sector they are practically zeroed. The capacity utilization rate remains high. Profitability remains stable and investments remain at high levels. Material cost pressures decrease further. The difference in size between firms with over 50 employees and those with fewer than 50 employees is also reduced.
The manufacturing sector slows down. The tertiary sector is good
At the sectoral level, in the third quarter there is a clear divergence between the manufacturing and services sectors. In particular, the engineering sector and above all the mechatronic sector slowed down, even if the latter maintains a positive balance between the expectations of an increase and decrease in production and orders.
On the contrary, in non-mechanical sectors the balance falls below the break-even point, mainly due to the recession in the textile-clothing and paper-graphics sector. The food sector is in good shape, while the rubber-plastic, wood, building and plant engineering, automotive, electrical industry, metal products, machinery and appliance sectors maintain good stability. In the stertiary sector, all sectors recorded clearly positive balances and, in most cases, strengthened compared to March.
For the third quarter of 2023, le expectations of Piedmontese companies remain positive, but moderate caution is observed compared to the previous March survey. 22,4% of companies expect an increase in production, while 14,5% expect a decrease. The optimists-pessimists balance is equal to +13,7%, down by 1,9 points compared to March. The employment forecasts maintain a positive balance of +13,7%, with 19,0% of companies expecting an increase in employment.
Expectations on orders undergo a slight decrease, with a balance of +4,4%, down by more than 10 percentage points compared to the previous survey. Export forecasts show a negative balance of -2,5%, probably due to uncertainty and the slowdown in the global economy.
- investments remain at good levels, involving 27% of companies, even if slightly lower than the March survey (28,4%). Recourse to layoffs continues to decrease, involving 5,6% of companies. The utilization rate of plants and resources remains stable at 82%, returning to the long-term average values.
A lterritorial level, an improvement above the regional average was recorded for Cuneo, Verbania, Turin and Canavese, with balances on production forecasts of +16,7%, +15,6%, +12,8% and +10,1% respectively. Novara, Alessandria and Asti show a slowdown, but maintain an optimistic outlook, with balances of +7,4%, +6,5% and +2,6% respectively. Vercelli (-15,2%) and Biella (-4,7%) recorded negative balances.
Piedmont: Turin above the regional average
Le companies in Turin they are more cautious in their expectations for the third quarter of 2023 than in the March survey. Although forecasts for production, orders and employment remain positive, there is a slight decline of about ten percentage points.
As in the rest of Piedmont, a notable difference can be observed between the manufacturing sector (slowing down) and the services sector (still expanding). The use of layoffs continues to decline and is approaching an all-time low, while the resource utilization rate remains stable and close to full capacity. The propensity to invest remains high, with a quarter of companies having significant programmes. About a third of businesses have orders guaranteed for over 6 months. Profitability is positive, especially in the tertiary sector. Input cost pressures ease and industrial energy prices fall.
Compared to the regional average, Turin's economic indicators are overall more favourable. Expectations for an increase in production and orders have balances about five points higher than the regional average. This positive datum in the Piedmontese capital is explained by the greater presence of sectors with more positive expectations, starting with the automotive sector.
Turin data
For the third quarter of 2023, the 26,5% of companies in Turin provides for a increased production, while 13,7% expect a decrease. The positive balance, equal to +12,8%, records a decrease of 10 percentage points compared to the previous March survey, but remains 5,0 points higher than the average balance in Piedmont. A similar trend can be observed for orders, with a balance of 10,3%, down by 15 points compared to the previous survey. Exports show a balance between optimism and pessimism.
- investments maintain a good performance, with almost 25% of companies envisaging significant spending programmes, although slightly lower than the Piedmontese average of 27,0%. Recourse to layoffs continues to decrease and involves 4,2% of companies, down by 2,1 percentage points compared to March. The utilization rate of plants and resources remains stable at 82%, returning to the long-term average values.
In the province of Turin it seems that there is rreducing the difference traditional between medium-large companies (over 50 employees) and smaller ones (under 50 employees), with production expectations of 20,9% and 14,8% respectively for the next quarter.
Focus on tourism
In the June survey a insight into the tourism sector, which includes companies in the hospitality sector (accommodation and catering), congresses (fairs, conventions, etc.), travel agencies and tour operators. In Turin, the sector has almost 11.000 companies, employs around 45.000 people and produces a turnover of 6,2 billion.
The province of Turin contributes 51,9% to Piedmont's tourism turnover and 3% to Italian tourism turnover. In the last decade, tourism turnover in the Turin area has grown more than the average for Piedmont and Italy, recording a 10% increase, higher than the national 9,3% and the regional 5,4%. According to recent data from the Piedmont Region, tourist arrivals and overnight stays in the first five months of 2023 increased by 14% and 11% respectively compared to the same period in 2022.
Marsiaj: "Signs of a slowdown in manufacturing at world and European level"
“Our June forecast survey detects with extreme sensitivity i signs of a slowdown in manufacturing at global and European level, as well as local. Significant are the cooling of expectations on production and orders and the drop in exports, which moreover follows a long period of robust growth. Equally punctual is also the detection of theasymmetry between manufacturing and services: also in this case, it is an element common to most of the advanced economies. In recent weeks we have been able to register signals of the opposite tenor. In particular, the reduction of pressure on costs is positive, starting with energy. On the other side of the scale is the persistence of inflation (Italy is in second place in Europe), which affects monetary policy and therefore the level of interest rates. The conflicting attitude of our country towards Europe, which emerged in the case of the ESM and the PNRR, with the controversial payment of the third installment, is worrying. As the Governor of the Bank of Italy also reiterated, the PNRR must remain an absolute priority and a decisive tool for relaunching national growth" he declared Giorgio Marsiaj, president ofTurin Industrial Union.
“The expectations of our companies remain positive. We are in the twelfth quarter of consecutive growth of the three main indices for the Piedmontese economy: the use of plants, +12,8% in three years; investments, +11,5% compared to after the pandemic; employment, with growth of 26,3 points in the balance optimists pessimists. A path that, also thanks to the reduction in the cost of energy, is facilitating development programs, as demonstrated by the use of the Cig at an all-time low" he commented Marco Gay, President of Confindustria Piedmont.
