The manufacturing economy in the first quarter of 2021. Manufacturing almost back to pre-covid levels

In both Treviso and Belluno, plant utilization is back around 74% and the order book ensures an average of 50 days of production. Not all sectors are experiencing the same intensity of the rebound, but there is also optimism for the second quarter: production and turnover are expected to grow for about 60% of the companies surveyed

Economy - published on 28 May 2021

Source: The Chamber of Commerce of Treviso-Belluno|Dolomiti press office

Treviso, May 27, 2021 – The comment of the President of the Chamber of Commerce of Treviso-Belluno|Dolomiti, Mario Pozza:
In a few months, thanks to progress in vaccination campaigns, signs of recovery have gained strength at the global level that still at the end of the year remained a mere hypothesis forecast.
The timing of recovery remains out of sync, for both geographical and sectoral reasons – explains Mario Pozza, president of Unioncamere Veneto -.
In the first quarter of 2021, in any case, the Veneto manufacturing industry recorded a more than positive trend (+3.1% compared to the previous quarter) that continued, albeit at a more
normalized pace, the rebound in activity highlighted in the second half of 2020. The outlook is also clearly improving, according to the assessments of entrepreneurs and also in view of the
progressive reopening of many activities in services. A fact that – comments Pozza – should also allow sectors such as food and the fashion system, closely linked to tourism,
catering and in general to the mobility of people, to recover lost ground. There is a 53% share of companies that expect production to grow in the next three months, up more than 20 points
compared to the end of 2020.
The Ihs-Markit survey on Italian manufacturing also shows similar evidence: the index rose in April to an all-time high (60.7 from 59.8 in March), driven by the positive dynamics of production
and the acceleration of orders not seen in years. Even with all the caution of the case, it is reasonable to assume – are the conclusions of President Pozza – that the context of
the regional industry is destined to improve further in the coming months, supported by the recovery of domestic demand (+5.6%) and foreign (+6% compared to the last three months of 2020), which
so far have been slowed due to the virus containment measures, due to uncertainty and concerns about the evolution of the health crisis.
Certainly some unknowns remain open, such as the increase in the price of raw materials, the release of redundancies, and whether the crisis has affected the financial soundness of companies.
These are aspects that we have verified – says Pozza – by submitting some in-depth questions to the same sample used for economic monitoring.
Indeed, 58% of the companies surveyed perceived a general increase in raw material prices compared to 2019, with an average increase of +12.7%. But the price of steel coils has
risen nearly +40% since August 2020. And there is a struggle to source electronic components. These price increases will be temporary, as analysts say, but in the meantime they complicate this
restart phase, because sometimes companies find themselves in the objective difficulty of filling orders, due to lack of raw materials or semi-finished products.
The employment scenario is less critical: only 7% of the companies interviewed think they will have to reduce their workforce once the freeze on redundancies is lifted. At least this is
what emerges from our sample – Pozza is keen to point it out – which analyzes manufacturing companies with 10 or more employees. Within this subset of companies, the share of
workers at risk of dismissal may be around 13% (a share that tends to rise for the fashion system). Bringing back these data to the universe of the manifacturing field, our esteem is of
approximately 5.000-6.000 probable redundancies in Veneto, to the state currently. But it will be necessary to understand the dynamics of the sector (and of those sectors which are today less
linked to the recovery) at the actual moment of the removal of the blockade.
The last aspect we investigated – concludes Pozza – concerns the financial situation of companies: 59% of the companies interviewed, after the beginning of the
covid-19 pandemic, did not request loan moratoria. Another 13% of companies
have requested moratoria, but these have already expired. Just over a quarter of the surveyed
sample (28%) has a moratorium still in place, but within this group, only 11% of companies expect to have difficulty repaying their debt when due and plan to seek restructuring. In
an overall comforting picture of the sector’s financial solidity – comments Pozza – this is the area of risk that can be circumscribed, which affects the various sectors
transversally, with greater intensification for the fashion system and means of transport.
The international and national picture
In just a few months, thanks to the progress of the vaccination campaigns, those signs of recovery that at the end of the year were still just a mere hypothesis have gained strength at a global
level. The timing of the recovery remains out of sync, for both geographical and sectoral reasons.

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