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11/11/2019
Industrial recovery: a new plan needed!

Mauro Severi, AICA President

Economy

 

According to Mauro Severi, president of Aica (Italian Garage Equipment Manufacturers Association), the sector sorely needs a concerted effort which involves companies, on-going training and a European strategy aimed at preventing a mass return to national markets.

 

Matteo Prioschi - journalist at Il Sole 24 Ore

The economy is showing signs of slowing down, both in Italy and in Europe. According to Aica, a decisive response is needed, one that focuses on innovation, collaboration between companies, training and a coordinated policy at continental level, in order to prevent individual countries from raising trade barriers in an attempt to defend national interests.

Turnover figures as well as orders, at least as far as the Italian industrial sector is concerned, for the month of June were alarming. Turnover, in fact, fell by 0.8% compared to the same month of the previous year, as a result of a substantially unchanged export (-0.1%) marred by a significant contraction of the domestic market (-1.0%). Industrial orders did much worse, with an overall contraction of 4.8%, influenced in this case by -9.1% of orders received from abroad. In July, the trend was confirmed at -0.8% for the turnover, while orders recorded a further -1.0% decrease. These elements should not be underestimated even if the broader picture looks more positive, given that ISTAT stated that the turnover remains almost stable on a quarterly basis compared to 2018.

Another negative sign concerns the industrial production in July, characterized by a 0.7% decrease annually as well as on the previous month. Looking at the various sectors in detail, what must be noticed is that the manufacturing sector experienced a 1.3% drop, while car production fell by as much as 14%. In this case, comparing figures over a wider period confirms the difficulties, given that the economic contraction was negative for the second consecutive month, while the trend has been declining for five months.

A further cause of concern are the economic news coming from other European economies, traditional outlet markets for many Italian companies, starting with Germany, where industrial production fell by 4.2% in July on a trend basis (Eurostat data). It is inevitable that the difficulties experienced by other Union Countries will have repercussions on the Italian economy, given that they are so interconnected, as Mauro Severi, president of Aica, points out: "Italian companies, especially in the automotive sector, are closely linked to the German industry mostly for spare parts and components". A relationship that does not relate to Italy alone, given that Germany absorbs 56% of the products exported from other EU countries.

In this context, the difficulties of the car sector are compounded, and loses momentum also internationally (for example, the demand for new cars in the first eight months of the year in Europe scored a rather depressing -3.2%) and, at least in the most advanced markets, has initiated a process of transition from diesel and petrol to the hybrid or fully-electric solutions. Going back to the initial data, the Italian automotive industry scored a -6.3% in June, and compared to the previous year orders fell by almost 16 per cent! Also in this case, July was slightly better, although still characterized by negative indicators (-2.7% turnover and -11.5% orders). Exports did better than the domestic market, but the negative indicators characterized the entire first half of the year.

Nevertheless, figures related to companies associated with Aica, says Severi "paint a positive picture for the sector. Of course we have seen a drop in orders and certainly the international situation has weighed on the strategies implemented by many companies, but analyzing the turnover we can say that we are still in line with previous results”.

The current economic situation, however, "must be viewed as an opportunity for a determined commitment that involves the entire Italian production system. Innovating, designing, creating and aggregating are the key words. Enhancement of excellence, openness to collaboration and above all training", continues Severi, without forgetting the need to encourage industrial development and to create the necessary infrastructure for the future industry 4.0. In addition, "unambiguous responses are needed at European level, not only to protect the interests of a single country, since no single EU country can compete on an equal footing with the U.S. or Chinese market. Common rules must be adopted on how to produce and how to deal with markets and international competition. It is Europe's duty to regain its leadership in free markets”.

Looking at markets outside Europe, Aica is planning a mission to China, at the invitation of the Government, with the aim of developing cooperation during trade fairs, increasing export opportunities. "The control of the markets, with unilateral rules, is not possible, we need collaborations and negotiations on an equal basis. For centuries Europe has been open to world markets, and all those cultures and societies that have built walls or folded back on themselves have always suffered periods of regression over time".

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