n° 160 – April/May 2019

Italy’s non-ferrous metals sector is alive and well but squeezed between thousands of uncertainties. The LME is never reassuring and even short-term forecasting has become impossible. The tension is considerable, the market is stormy, the margins are ever smaller and the risks are always higher. The successful company has a lean structure and successfully contains its costs and daily margins without being too tied by major commitments. However, Italian industry is suffering from a stalemate in investments and delay that will result in a lack of innovation and reduced competitiveness.

Political instability, protectionism and European elections are slowing the national impetus and also Italy’s exports: in March, the drop in exports when compared to the same period last year was 2.5%, with the reduction in purchases concerning almost all our markets outside the EU - from Russia to Turkey, from the Middle East to China. Imports have offered mixed signals: the average drop is 0.5% while purchases of consumer goods (+8.5%) are flying, particularly long-term ones.

China is an essential reference market for Italian companies, with their exports more than doubling between 2001 and 2017, going from 1.2% to 3%. Today, China is our third-largest customer but the problem in this case is the rules of the game and Beijing’s economic model.

Interestingly, hourly productivity following the 2008 financial and economic crisis has rapidly aligned with that of our two major European competitors, namely France and Germany. The crisis accelerated the twin process of ridding the market of less efficient companies while simultaneously witnessing the entry or strengthening of more efficient ones.

This change in the demography of companies has been a powerful engine for increasing the country’s average productivity, such that our manufacturing industry is slowly changing identities in directions that deserve greater attention from the political class.