Economy - published on 15 November 2023
Fonte: ufficio stampa Unioncamere del Veneto
Pozza, Unioncamere del Veneto – Uncertain forecasts for the fourth quarter with respect to geo-economic scenarios. But investments continue to be made in digital technologies to support business intelligence, trying to govern complexity.
Padua, 14 November 2023| In the second quarter of 2023, industrial production in the Veneto region showed a slowdown on a trend basis, still affected by the counter-rebound on 2022, while compared to the second quarter of the year manufacturing activity held up. According to the VenetoCongiuntura survey, industrial production recorded a seasonally adjusted change of +0.4% (-6.2% the non-seasonally adjusted change). The trend on a tendential basis recorded a -2.7% decrease.
This is the picture that emerges from the data of VenetoCongiuntura , the economic analysis on the manufacturing industry conducted by Unioncamere del Veneto and carried out on a sample of over 2,000 companies with at least 10 employees, to which a total of over 93,000 employees refer.
The slowdown in the Veneto manufacturing industry continued in the third quarter of 2023 – commented Unioncamere del Veneto President Mario Pozza – We are faced with a negative quarter both in terms of production and turnover and in terms of new orders. Even though some indicators, such as the substantial stability of the order portfolio and forecasts for the end of the year that are more marked by uncertainty than pessimism, a picture still emerges that can be ascribed to a scenario of ‘normalisation’ of the economic cycle, after two agitated years of post-pandemic restart, of sectors supported by expansive fiscal policies, of anomalous functioning of the value chains also due to war events and energy price rises. Certainly this ‘normalisation’ is affected by further disruptive factors – see the conflict between Gaza and Israel – with asymmetric effects between sectors. Those linked to consumer goods (on which inflation has an impact) continue to suffer more than investment goods, which, despite continuing high interest rates, are also benefiting from greater international openness, and thus from greater market risk diversification. In spite of everything, the industrial machinery sector showed production and order intake in positive territory on an annual basis, although it too did not escape a downturn in the economy compared to the previous quarter.
It is a worrying situation that is not only in Italy, but one that I was able to hear and witness in conversations at institutional meetings during my missions abroad in Chicago and New York. My invitation to companies is to go beyond our European market, which is now emerging as a domestic market, and beyond the already established markets, such as the United States, which still offer many opportunities, and look for other markets. Indeed, it may be of strategic commercial importance to consider countries such as Australia, India, Latin America, and China. These are markets with buyers who can spend. Made in Italy, in fact, addresses a high-end target, and it is precisely this target that needs to be intercepted. Each market – highlights President Pozza – must be approached with absolute preparation and knowledge in order to reduce business risk. The Chamber of Commerce System is there with Venicepromex and with the Italian Chambers of Commerce abroad to accompany Made in Italy in the world.
The outlook for the fourth quarter is marked by uncertainty: companies do not see ‘all dark’, but have no visibility into the future, geo-economic scenarios are very complicated, and industrial planning is affected. Also in order to face these adverse scenarios, manufacturing companies in Veneto have continued to invest in some technological frontiers related to digitalisation. In fact, the results of a research study, co-designed by the Unioncamere Veneto Study Centre and Ca’ Foscari University of Venice, which periodically checks the state of adoption of digital technologies in Veneto enterprises, are very interesting. If in 2017 only 1/3 of the manufacturing enterprises in Veneto adopted 4.0 technologies, today we have moved to 2 out of 3 enterprises. And that’s not all: five years ago, only 15% of companies opted for a complex mix of digital technologies, today we have risen to almost 50% investing in process automation and business intelligence: tools that allow decisions to be made in uncertainty.
The average distribution of production judgments remains unchanged compared to the previous quarter: 47% of the sample declares an increase in production, while 38% declare a decrease. 15% declare a substantial stability.
As regards the type of goods produced, the tendential variation is positive only for investment goods (+3.5%). On the other hand, the production of consumer goods (-4.4%) and intermediate goods (-3.8%) decreased.
At the sectoral level, the economic activities showing growth compared to the same period in 2022 are paper and printing (+6.4%), manufacture of transport equipment (+3.4%) and machinery and mechanical appliances (+3.3%). The food and beverages sector recorded a positive but less pronounced change in production (+0.7%), while production decreased for all other sectors. The largest declines were recorded in the manufacture of rubber and plastic products (-9.9%), in the wood products and furniture industry (-7.7%) and in the manufacture of electrical and electronic machines (-7.6%).
A confirmation of the slowdown in manufacturing production can be seen in the indicator of the capacity utilisation rate, which drops from an average of 75% in 2022 to 73% in the first half of the year and stops at 70% in the period July-September 2023. On the other hand, the number of days of production assured by the order book remains stable at 55.
With regard to the level of inventories of finished goods in the quarter under review, 56% of the industrial enterprises consider it to be adequate, 6% of the sample assesses inventories to be low, and 9% consider them to be surplus. 28% of the enterprises do not hold any inventories.
Other indicators
The total turnover of manufacturing enterprises in Q3 2023 decreased by -2.2% year-on-year. Geopolitical uncertainties and weak international demand also weighed on the orders indicator: the decrease in orders affected both foreign (-3.9%) and domestic markets (-3.4%).
Forecasts
The expectations of entrepreneurs in the manufacturing sector for the last quarter of the year remain positive. Compared to the second quarter, the share of surveyed entrepreneurs expecting an increase in production rose to 44% (it was 37% in Q2 2023) and the share of pessimists expecting a decrease fell to 26% (it was 29%). Entrepreneurs who expect a stable situation are 30% (was 34%).
Focus Padua and province
In the third quarter of 2023, industrial production levels in Padua and its province continued the slowdown process that began in the previous quarter. According to the VenetoCongiunture survey in the July-September period, industrial production recorded a seasonally adjusted change of +0.8% (-5.8% the non-seasonally adjusted change). The trend change was -3.6%, even more downward than the -2.3% recorded in the previous quarter.
We are facing one of the most delicate moments for the Italian and Veneto production system – says the president of the Padua Chamber of Commerce, Antonio Santocono – with very heavy consequences on the budgets of many companies and their ability to resist on national and international markets. Precisely in this continuing crisis that has been going on for several years now, being able to analyse and interpret the state of health of our Veneto and local manufacturing industry can help us grasp more accurately the most critical points of our economy that need further attention and help. First with the pandemic and now with the international war tensions, our companies have never given up, once again demonstrating all their resilience and great desire to react. It is this great courage that emerges from the results of this economic survey: that is, the desire of our companies to never give up. As the Chamber of Commerce of Padua, we are doing everything we can to support our local companies, in the hope that a new economic growth marked by unavoidable values such as courage, resourcefulness, and the brilliance of new business ideas, which we are convinced can still be essential levers for a social and economic rebirth, will soon be underway. In this 2023 that is drawing to a close, we have allocated more than EUR 7 million in favour of businesses. In particular, the contributions poured into the territory concern projects and initiatives in the most strategic areas such as: innovation and digitalisation aimed at sustainable development, internationalisation, tourism and culture, education and vocational training, environmental protection and market legality.
The slowdown in the production activity of companies in the province of Padua in the third quarter of the year is also confirmed by the slowdown in the indicator of the capacity utilisation rate, which dropped to a value of 72.5%, 5.2 and 1.1 percentage points lower than that recorded in the first two quarters of 2023 (77.7 and 73.2% respectively).
With regard to the level of finished goods inventories in Q3 2023, 55.7% of industrial enterprises considered it adequate, while 6% of the sample rated inventories as low and 8.4% as surplus. 29.8% of the enterprises did not hold any inventories.
The production assured by the order book collected as at 30 September 2023 stood at an average value of 56 days, with a marked difference between large companies (over 50 employees), which declared an average of 84 days of assured production, compared to 50 for small/medium-sized companies. The number of days is in line with the regional average of 55 days.
Other indicators
As far as the other indicators are concerned, the change in total turnover in Q3 2023 compared to the same period in 2022 shows a decrease of -3%, confirming the negative trend in production.
Orders also showed a negative performance: -2.5% was the trend change for total orders. This downturn in the economy of Padua’s companies is due both to the foreign market, which records a decrease in orders of -4.4% on an annual basis, while the drop in orders from the domestic market is more moderate, recording -1.6%.
Forecasts
The climate of confidence remains positive for October-December 2023 despite the slowdown in recent quarters, economic uncertainty and the difficulties caused by international conflicts in the economy. In the third quarter of 2023, entrepreneurs’ outlook for October-December 2023 remains positive: on average, 52.4% of companies are betting on an increase in production, compared to 23.3% who are pessimistic and 24.3% who are giving indications of stagnation. With regard to turnover, only 22.3% of pessimists declare a decrease, but almost 52% of Padua entrepreneurs expect an increase in turnover for the last quarter of 2023. Foreign orders will also increase for 41.8% of entrepreneurs and for almost 52% domestic orders will also increase.
