Economy - published on 23 November 2022
Source: Press Office Presidency of the Chamber of Commerce of Treviso – Belluno | Dolomites
Turnover continues to grow, also on the wave of inflationary pressure, production slows down partly supported by outstanding orders, strong uncertainty is instead registered on demand,
especially abroad.
Treviso, 23 November 2022.
The comment of President Mario Pozza
It’s a black and white balance, this relative to the trend of the manufacturing sector in the third quarter of the year – underlines the President of the Chamber of Commerce of Treviso
and Belluno|Dolomiti Mario Pozza – the fruits of the whole post-pandemic restart are still being brought home in sales, certainly with different margins compared to those expected at the
time of the signing of the contracts due to the strong increase in business costs; production, it is true, is slowing down on the cyclical pace, but the capacity utilisation indicator remains high
for the moment (76%) thanks to outstanding orders. On the other hand, the slowdown in the collection of new orders, especially for foreign demand, is worrying, both in Treviso and Belluno: but it
is a fact that is also confirmed by the national trends of the sector.
Beneath the surface of the average figure – points out the President – it is quite clear that energy-intensive sectors, such as the rubber plastics and metal industries, which evidently,
by working on intermediate goods, intercept the slowdown in demand in the various supply chains earlier than other sectors, are experiencing greater difficulties.
However, it is interesting to note, – continues Pozza – how domestic demand is holding up a little better, and how the length of the order backlog remains around 58-62 days, still higher
than the average figure recorded in ‘normal’ years such as 2018 and 2019. In addition to unfinished work, it cannot be ruled out that what has been set in motion by the PNRR, which moves EUR 17
billion and whose impact on Italian GDP is estimated at around 0.8%, also has a positive influence on these figures.
If this is true, the new government has every duty to put the various projects envisaged by the PNRR on the ground as quickly as possible – urges President Pozza – along with the measures
envisaged by the Aid Decree: so as to mitigate the adverse scenarios that are still causing much concern among entrepreneurs, as well as families who are seeing their purchasing power eroded. Of
course, they must be strategic projects useful to communities, with a positive impact in the medium to long term, not done just because there are European funds. This would be a serious
short-sightedness.
Expectations for the last part of the year, – the President concludes – still point to relative business confidence on production and turnover: 42% of entrepreneurs in Treviso and 50% in
Belluno still trust in a quarter of growth. Much more uncertainty is registered, instead, in the expectations on the tone of demand. In Treviso the sample almost equidistributes itself in the three
positions of growth, stationary or downturn, both for domestic and foreign demand. While in Belluno, thanks to the eyewear and mechanical engineering industries, a thread of more optimism emerges
on foreign demand (45% optimists against 27% pessimists). In recent weeks there have been increasingly concrete signs of recourse to social shock absorbers or non-renewal of temporary contracts,
especially with reference to important leading companies.
Everything is hanging by a thread, which obviously also passes through the delicate international balances, perhaps now at a turning point after the US-China meeting. I believe – Pozza argues –
that none of the major leaders, even from opposing positions, wants or can afford a recession. As we said in the last report, the economy needs to operate in a stable international context.
Putin’s Russia, in this sense, seems increasingly isolated. Let us hope that a peace negotiation will soon be reached, which will first of all break the conflict, and then restore the most
favourable conditions for development. We also have to strive for more sustainable development, to safeguard the planet that hosts us. A lot of investments are at stake. And we do not have much
time to lose, compared to the unprecedented challenges posed by climate change.
The international and national framework
In the latter part of the year, the impulses linked to the various waves of the pandemic and war events are further redefining the economic picture, which is now basically characterised by two
themes.
On the one hand, we are witnessing a worsening of international demand, caused by the erosion of households’ purchasing power as a result of rising prices, as well as by the more restrictive
monetary policies aimed precisely at combating inflation itself. On the other hand, signs of supply normalisation are emerging, boosted by falling energy prices in the European market and smoother
functioning in global value chains.
These are only partly related trends, whose effects on growth remain difficult to decipher. As long as inflation continues at these rates, further interest rate hikes are expected, which will
further penalise investment as well as household consumption. On the other hand, the reduction in the prices of many commodities at some upstream stages of the value chains is quite evident, but –
as the analysts of CongiunturaRef. (note of 7 November 2022) note – “the speed of transmission downstream remains uncertain, not least because the pass-through of cost reductions to final prices
is generally slower than increases”.
As for the falling gas prices, it is feared that this is only a temporary dynamic, facilitated by the particularly favourable weather conditions of the last few months and a run-up in storage that
was certainly effective, but which only shifted the problem to January-February 2023, when reserves will have to be restored.
Against this backdrop, GDP growth forecasts in the major economies are being reshaped, as summarised in the table below, with still surprises in the ‘rents’ from the post-pandemic restart and a
substantial convergence of advanced economies on a ‘flat’ 2023 (but not quite a generalised downturn, with the only obvious exception of Russia).
