The Made in Italy industry weakens in March: -0.5 in the month, -3.5 trend

Textiles and clothing did badly, falling by almost ten points. But rubber-plastics, metallurgy and electronics, machinery and means of transport, especially cars, are also decreasing. There are few positive exceptions in the March ISTAT data on industrial production, which sees a reduction of 3.5% on an annual basis. February’s mini recovery in economic terms was therefore immediately reabsorbed, with a monthly slowdown in manufacturing output of 0.5% compared to the previous month, a result that brought the balance sheet for the quarter into the red by 1.3%. In trend terms, the reduction, as mentioned, is 3.5% and this is the 14th consecutive negative result, in a downward trend that began in February 2023.

The decline affects all main types of industries at an aggregate level but is most marked for durable goods. In the machinery sector, down almost six points, the long stand-by of the national market is probably starting to take its toll, awaiting the definitive grounding of the 5.0 bonuses in order to restart the investment cycle by customers.

Cars are in free fall, dropping by 20% on an annual basis but also showing a double-digit drop compared to the previous month, a direct result of the production slowdowns carried out in the month by Stellantis, in particular at the Mirafiori site. There are few positive exceptions among the sectors: food, wood-paper, chemical and pharmaceutical. In the January-March balance sheet, manufacturing is thus in the red by more than three points and the only positive sector is the food sector. There is therefore a small cold shower on growth prospects, within a framework that continues to remain in the balance.

The latest indications coming from the economy are in fact mixed, with employment continuing to break new records and with first quarter GDP growing beyond expectations, progress of 0.3% (the third consecutive increase) higher than expected created by Germany and France, the synthesis of an increase in added value in all sectors. With a non-trivial distinction: if in fact the industry item in the broad sense sees a growing quarterly added value, this is linked only to the “construction” item, while industry in the strict sense, as we have seen, has embarked on a downward trend . But even looking at the latest GDP data, it is difficult to think of a situation that is clearly turning “for the better”, taking into account, for example, what happens in qualitative surveys. In fact, business confidence fell in April, a general decline which also involved the manufacturing sector, where both assessments on orders and expectations on the level of production worsened. Just as, following six consecutive months of progress, the purchasing managers’ PMI index is also decreasing, a parameter that falls below the critical threshold of 50, the one that separates contraction from growth

A situation which also presents more factors of uncertainty in Europe, starting from the first EU manufacturing company, Germany. Although growth estimates for the full year of 2024 were recently revised upward by a decimal point, from +0.2 to +0.3%, the industry continues to exhibit widespread weaknesses. In fact, in March industrial production dropped by 0.4%, 3.3% compared to the same month of the previous year, with negative data that also extends to orders, and therefore to the future receipts of companies. Among the issues, also the car, fresh from a still growing growth in 2023 (domestic production in double-digit progress) but now inserted in a downward trend, with national production falling by 9%, driven downwards in particular by fall in demand for electric models. The growth in bankruptcy requests also continues in the country, reaching almost 10 thousand units in February, for a total of 4.6 billion in assets involved, triple compared to what happened in the same month of 2019, before Covid.