Source: Unioncamere Veneto press office
Venice, 5 August 2021 | In the second quarter of 2021, the Veneto economy recovered faster than expected, thanks to the improvement in the health situation that led to a faster easing of
restrictions on pandemic control.
The trend is characterised by a vibrant phase of industrial activity, although the delta variant still casts uncertainty on restrictive measures and future scenarios. Despite still unclear
market dynamics, manufacturing in Veneto presents positive expectations and the gap with respect to average 2019 data is narrowing: in the period April-June 2021, industrial production
registers a consistent recovery of +8.4% compared to average pre-pandemic levels. In particular, in Q2 2021 industrial production, after the +12% year-on-year increase recorded in the first
three months of 2021, picked up speed by increasing by +34.1%.
However, this result appears to be a foregone conclusion given that it relates to the 2020 period of greatest blockage in manufacturing activity. The increase is also recorded compared to the
previous quarter with a
seasonally adjusted change in the economy of +5%. Other indicators also increased: turnover (+6.6%) and orders both for the domestic market (+7.1%) and abroad
(+8.1%). This is confirmed by the data of the VenetoConjuncture survey by Unioncamere del Veneto conducted in July 2021 on a
sample of more than 1,900 companies with at least 10 employees,
to which more than 83,000 employees refer (
www.venetocongiuntura.it), which show us the different recovery rates at play in Veneto
industry.
Analysing the average distribution of judgements expressed by entrepreneurs concerning the economic recovery, which allow us to understand how widespread the positive situation among companies
may be in the second quarter of 2021, it emerges that the share of Veneto manufacturing companies that declared production to be increasing has risen to 68% (it was 53% in the first quarter of
2021), while only 13% declared it to be stationary and 19% to be decreasing (it was 35% in the previous quarter). This distribution of judgments highlights the economic recovery beyond
expectations, which is consolidated and continues to affect the absolute majority of companies. The same applies to turnover: in Q2 2021, 70% of companies say their sales have increased compared to
the beginning of the year, while only 20% report a loss.
The trend change in industrial production of +34.1% is inevitably affected by the comparison with the low point of the crisis period in Q2 2020. The analysis therefore becomes more significant if
we compare the performance of industry in Veneto to the pre-crisis period, identified as the 2019 average. Specifically, in the period April-June 2021, production marks a momentum of +8.4% compared
to pre-crisis average levels.
At the sector level, the sectors that recover most are food and beverages (+27%) favoured by the reopening of bars and restaurants; electrical and electronic machinery (+20.1%); other manufacturing
(+17.3%) including pharmaceuticals and chemicals; and wood furniture (+12.8%) a sector that feels the effect of incentives for renovations. Also increasing, but with an increase lower than the
regional average, are the metals and metal products (+4.8%) and means of transport (+0.6%) sectors, which are affected by the abandonment of conventional engines in favour of zero-impact vehicles
and the impact on the entire supply chain.
On the other hand, the sectors that are slow to register a significant recovery are paper and printing (-1.7%), textiles and clothing (-7.2%), also penalised by problems in the supply chain that
have led to the interruption of some production lines, marble, glass and ceramics (-12.1%) and rubber and plastics (-19.4%), which is affected by the significant reduction in trade with foreign
countries.
The turnover indicator in Q2 2021 also shows a rebound compared to the average values of 2019, with an increase of +14.6%. While, as far as orders are concerned, the recovery is substantial
especially for those coming from the foreign market (+11.9%), a little less for those from the domestic market (+7.4%).
The liveliness of production activity and orders of Veneto companies is well highlighted by the upward curve of the degree of capacity utilisation, which in Q2 2021 stands at a value close to
76%, up compared to the beginning of the year (it was 73%) and to the pre-Covid situation (it was 73% between April and June 2019). The sectors showing a greater increase in the degree of
capacity utilisation are electrical and electronic machinery (79%, +7 p.p. compared to Q2 2019) and transport equipment (82%, +6 p.p.). By contrast, textiles and clothing (70%), rubber and
plastics (77%) and machinery and mechanical appliances (76%) remain at the same 2019 level.
Despite the fact that there are still some areas of uncertainty regarding health measures, the delta variant and progress in vaccination campaigns, Veneto manufacturing companies seem to be
looking to the immediate future with confidence and optimism. Forecasts, looking ahead to the 2021 summer season, remain substantially positive: on average, 50% of companies bet on an
increase in production, compared to 19% of pessimists and 31% who give indications of stagnation. Compared to these expectations, marble, glass and ceramics, metals and metal products, machinery
and mechanical appliances and food and beverages are the most positive. More pessimistic were companies in the rubber and plastics and transport equipment sectors.
This sentiment is also confirmed by the Ihs-Markit survey on Italian manufacturing, released on 2 August: the sector is also growing strongly in July, although with some signs of a
slowdown caused by delays in supply chains and inflationary pressures on raw materials.
The data confirms that Veneto companies are at the forefront in driving the recovery, – explained Mario Pozza, president of Unioncamere Veneto. – The figures are extremely
positive for the manufacturing sector in our areas and an extraordinary quarter has just ended, during which the growth in production and turnover has gained further speed compared to the first
part of 2021.
With these performances, – continues Pozza, – entrepreneurs are looking forward with confidence to the next quarter, during which the majority of companies surveyed expect
production to grow further despite the summer break. In fact, the production system, aware of the opportunity provided by the recovery, will not go on holiday, but will continue to work to try to
increase the positive trend.
It is necessary, however, – warns Pozza, – not to lower our guard even with such a favourable statistical picture, because there are some critical factors that may
affect the sustainability of this recovery over time: the shortage and price increases of raw materials are the first factor, which is struggling to normalise, despite some forecasts that prices
will fall within the year. Then there is undoubtedly the trend of vaccination campaigns worldwide: there are still too many disparities in coverage between geographical areas, and the most
vulnerable countries, especially among emerging economies, could trigger a deceleration in demand and create a framework of instability.
In this context, – concludes Mario Pozza, president of Unioncamere Veneto, – it is essential to avert the risk of new lockdowns, which would be a burden on the
race of companies in the Veneto region. And we hope that the PNRR resources will reach the ground and on this game the chamber system is in the front line alongside the Region and other
institutions. The projects must be able to generate and disseminate value in the regions, generating widespread impact on the various supply chains. Among the priorities is the need to invest in
the infrastructure system, a strategic hub for the development of the territory, guaranteeing competitiveness and opportunities for our companies that are driving the recovery.
