Manufacturing in the second quarter of 2025

The international and national framework

At the end of July, the European Union also reached an agreement on tariffs with the American administration. The rate for European goods exported to the United States was set at 15% (including cars and components, pharmaceuticals and semiconductors). Tariffs for the export of steel, aluminium and copper remain at 50%. The agreement also seems to provide as a counterpart a series of investments in defence and energy technologies, but this takes the form more of a non-binding political commitment than an integral part of the agreement itself. At the time of preparation of this report, any exceptions in the application of duties are not yet known.

Authoritative commentators have called the agreement bad. According to the intentions of the European Union, it should promote the normalization of trade relations between the European Union and the USA. The alternative, according to most “realists”, was to enter into a spiral of tariffs and mutual trade restrictions, with a probable escalation that would lead to a trade war with too many unknowns. Already the uncertainty of past quarters, linked to the various announcements and retractions by the US administration, had led many companies to bring forward exports of their products to the United States. For Italy, based on the latest Istat data, this demand advance translated into an increase in exports to the USA of +7.8% in the first six months of 2025, compared to the same period of 2024.

Furthermore, there was also a macroeconomic effect of this greater intensity of world trade, combined with expansionary fiscal policies: the International Monetary Fund (IMF), in its July Outlook, revised the growth estimates of the world economy slightly upwards: the increase in world GDP is estimated at +3.0% for the year 2025, compared to +2.8% last April. It is, however, a figure that averages different growths between the various economies.

For the United States, the increase is confirmed at around +1.9%. More decisive, however, is the increase in GDP for China which the IMF has revised upwards from +4.0% in April to the current +4.8%. The growth is mainly driven by exports, which are in sharp reduction towards the US market, but largely offset by sales to other markets (in particular South East Asia, Vietnam, Thailand and Indonesia, Africa and Germany for the European Union). Chemicals/fertilizers, electric machines and components, semi-finished iron or steel products the main product items on the rise for Chinese exports. The growth rate also remains high for the Indian economy (+6.4%) and +2.3% is the estimate for the Brazilian market.

On the other hand, the increase in GDP remains weak for the Euro Area, which IMF estimates at +1.0% in the latest Outlook (although slightly stronger than the +0.8% forecast in April). Within the area, significant differences remain in the growth rates of the various economies. For Spain, the increase to +2.5% for 2025 is confirmed, while Italy (+0.5% in the latest Outlook, revised estimate compared to +0.4% in April) and France (+0.6%) deviate slightly from stationarity. The German economy is still at a standstill although the positive sign appears in the latest forecasts (+0.1%, compared to the stationary nature forecast in the previous projection). A restart of the former locomotive of Europe should be expected from the multibillion-dollar fiscal measures for the three-year period 2025-2027 approved in June by the German government, but which should be applied, presumably after the summer break, with the passage through Parliament.

Signs of stabilization are observed for eurozone manufacturing, based on the HCOB Purchasing Managers’ Index for June. This index is improving compared to past months, although still below the expansion threshold. The sample interviewed reports a slight increase in production levels for the fourth consecutive quarter, and a stabilization of order collection. This balancing of forces which, on the one hand, cannot get robust growth off the ground, on the other hand do not even trigger recessionary dynamics, seems to be determined above all by the capital goods industry, which is called upon to replace obsolete technologies, which are not also appropriate for governing uncertainty in terms of company programming (which must become more adaptive than ever to changing scenarios).

If, therefore, the effect of US policies has helped to sustain global, European and national economic growth in the short term, more questions are gathering about the impact in the medium to long term of these protectionist policies.

For analysts, the stability of domestic, and European, exports to the US market is linked to several factors. First, what will be the effect on final prices, even after sharing the price increase with US importers; second, whether substitution effects can be grafted for products with low added value, more exposed to being replaced with similar but economically more convenient types; third, if there are choices of industrial relocation on American soil by European and Italian producers (here too, with doubts referable to the American manufacturing supply chain, whether it is really able to take the place of the European one with equal skills and competitiveness).

These first quarters of the year have nevertheless set the European and Italian production chains in motion again. This can be seen, for Italy, from Istat data on imports, which in the first six months of the year and with reference to purchases from non-EU countries, increased by +8.7%. This import flow accounts for 40% of the total purchases from abroad for Italy.

To confirm these supply chain operations, the figure for employment is also cited. Veneto Lavoro data for the first six months of 2025 sees the employment balances of private companies with a positive sign. For metalworking, in particular, the balance is higher than that observed in the first half of 2024.

For Made in Italy, the balance also remains positive, albeit at lower levels than last year, and with areas of fragility in the fashion system and eyewear.

It is within this framework that the results of the economic survey by Unioncamere del Veneto relating to the second quarter of 2025 are placed on a sample of over 2,000 regional manufacturing companies with at least 10 employees.

The dynamics of Venetian manufacturing by sectors

In the second quarter of 2025, the Venetian manufacturing industry grew on a cyclical basis by +2.4%. In addition to the advance in demand towards the US market, the result also adds signs of the stability or restart of some important regional supply chains. This is confirmed by the degree of use of the systems which, in the quarter in question, stood at 70.5%, up from 68.8% last quarter. On a trend basis, the change in production is close to stationarity (-0.8%).

Compared to the previous quarter, the collection of orders from both the domestic market (+1.3%) and abroad (+0.7%) is also a positive sign. The production days ensured by order collection rise to 55, compared to 52 last quarter. Compared to last year, demand is essentially stable, both on the national and foreign fronts.

This is the underlying picture that emerges from the Unioncamere del Veneto survey for the second quarter of 2025. But it is a result that averages different trends by sector.

For industrial machinery, an increase is observed on a cyclical basis for all the indicators monitored, and the collection of orders on a trend basis is also increasing. A positive fact in itself considering the moments of decline recorded, every other quarter, in the past.

They also recover the “made in Italy” sectors on a cyclical basis, in particular fashion, most likely due to the aforementioned effect of “advance demand”, and wood furniture. It should be immediately underlined, however, that this rebound does not reverse the annual trend of wood furniture, which is negative (-4.9% production compared to the same quarter last year).

Glasses were bad on all the indicators monitored, with the exception of a rebound of +9.4% on foreign order collections. The degree of use of the systems also shows a significant discontinuity compared to the past: it is positioned at 61%, 10 percentage points less than the average of the last quarters of the sector and the same regional average for manufacturing. Symptom of production downtime situations in the supply chain, which seem to mainly concern processing for third parties.

The manufacturing of Treviso and Belluno

Based on data from the Unioncamere del Veneto survey for the second quarter of 2025, production in the Treviso manufacturing industry is slightly increasing on a cyclical basis (+1.0%). This result is also accompanied by a slight rise in the degree of capacity utilization: from 68.4% last quarter to the current 69.6%. In comparison with the previous year, however, production suffers from a decline of -2.3%.

Turnover also grew on a cyclical basis (+4.4%, supported in particular by the foreign component), but decreased compared to the second quarter of 2024 (-0.9%).

Compared to the previous quarter, order collection from the foreign market also increased slightly (+1.3%), while demand from the domestic market was stable. The production days insured by the order book are rising to almost 57 (there were 53.7 in the first quarter of 2025).

New orders, however, decreased in comparison with last year, both for the foreign (-3.3%) and national (-1.1%) markets.

These are the results of the survey for the second quarter of 2025 on a sample of 491 Treviso manufacturing companies with at least 10 employees, to which 26,178 employees refer.

The forecasts for the third quarter of 2025, collected in the same economic survey, see a slight prevalence of increase judgments over decrease ones. The result is a slightly positive balance. The relative majority of entrepreneurs interviewed, however, expect stability of all monitored indicators. In particular, the share that leans towards stationarity is around 40% for production and turnover, and rises further, to almost 45%, for domestic and foreign demand.

The sample interviewed for Belluno manufacturing is made up of 82 companies with at least 10 employees, to which 4,740 employees refer. As also observed in previous monitoring, the results of the provincial survey can be amplified due to the reduced number.

In the second quarter of 2025, the production of Belluno manufacturing companies is stationary both in comparison with the previous quarter and with the same quarter of the previous year: in both cases the change is +0.1%. The degree of use of the systems is also almost stable and in the current quarter it is positioned at 67.0% (it was 67.4% in the previous one).

Turnover and order collection from the internal market are also close to stationarity on a cyclical basis. Only new orders from abroad are slightly up (the change is +1.3% compared to the previous quarter). The production days insured by the order book are also stable: they are 49.2 days in the quarter, they were 50.2 in the previous one.

The comparison on a trend basis, both for turnover and for order collection, is a slight negative sign. Foreign demand fell in particular (-1.9%).

The forecasts for the third quarter of 2025 were collected from the same sample of Belluno companies. For the next quarter, the balance between forecasted increases and decreases is positive only for foreign demand. The relative majority of entrepreneurs interviewed, however, expect stationarity in order production and collection. In particular, the share of stationary judgments is around 40% for production and domestic orders, a share which rises further (to 45%) for foreign demand. For turnover, the responses are distributed equally between judgments of increase, stability and decrease.

“The indicator that guides us in reading the data from the Unioncamere del Veneto survey of the second quarter of 2025 is, in my opinion, the economic step of manufacturing production – comments Mario Pozza, the President of the Treviso-Belluno Chamber of Commerce|Dolomites.

For Treviso, production is slightly increasing compared to the first quarter of 2025 (+1.0%).

For Veneto it grew by +2.4%. In addition to the advance in demand towards the US market, the result also adds signs of the stability or restart of some important territorial supply chains. The degree of use of the systems is confirmed: it is slightly up compared to the previous quarter and stands at around 70%, both for Treviso and Veneto. For Belluno the economic pace of production is stationary, and stable, at 67%, is also the degree of use of the systems. These results average the different trends observed for the sectors – continues the President.

The “Made in Italy” sectors are recovering on a cyclical basis, in particular fashion, most likely due to the “advance demand” effect of the US market, and wood furniture. However, this rebound does not reverse the annual trend of wood furniture, which is negative compared to the same quarter last year.

Eyewear, on the other hand, suffers from a downturn for all the indicators monitored, with the exception of a rebound for foreign order collection. For this sector, the degree of use of the systems also shows a significant discontinuity compared to the past. For machinery, on the other hand, in addition to production, all other indicators are also increasing on a cyclical basis, and order collection on a trend basis is also increasing. A positive fact in itself considering the declines recorded, every other quarter, in the past. A confirmation of possible supply chain operations, we also find in the employment data of Veneto Lavoro. In particular, for regional metalworking in the first six months of 2025 the employment balances are positive, and higher than in the first half of 2024.

Perhaps signs of a possible, desirable restart of manufacturing. Now, however, these possible signals must be supported, above all the productivity of our companies must be supported, stimulating demand, even with wage increases. Supporting productivity also means supporting the competitiveness abroad of our companies, accompanying them in the process of market diversification.
Diversification needed to manage uncertainty related to changing international scenarios – comments the Chairman.

Let’s think about the United States, one of our main economic partners. In the short term, the fear of duties has encouraged the intensification of trade towards this market. But in the medium to long term the stability of exports to the USA will depend, firstly, on what the effect of duties will be on final prices, even after deduction of a sharing of the increase with US importers. Secondly, whether substitution effects can be introduced for products with low added value, more exposed to being replaced with similar but economically more convenient types; third, if there are choices of industrial relocation on American soil by European and Italian producers (here too, with doubts relating to the American manufacturing supply chain, if really able to take the place of the European one with equal skills and competitiveness).

As a chamber system we are already working alongside companies to encourage market diversification. From 18 to 21 October – concludes Pozza, also in the role of President of Assocamerestero – we will host the PYMES Forum in Treviso, welcoming delegates from 20 countries in Latin America and Central America. During the three-day event, participants will have the opportunity to visit our companies and take part in B2B and B2C meetings with a focus in particular on Mexico, Argentina, Chile, Brazil, Uruguay and Colombia.”

Translated by Agnese Berti

Intern at the Chamber of Commerce of Treviso – Belluno|Dolomites