Steering a Straight Course also in Troubled Waters: the Latest Sector Data

The year 2018 was a very positive one for the Italian machine tools, robot and automation industry, as very satisfactory results were indeed achieved. The forecasts for 2019 – also in light of a slowdown of the domestic market – rather seem to show a stationary situation, also due to the uncertainty that currently features the economic and legislation scenarios. Please find in the following article the details of the data provided by UCIMU-Sistemi per produrre as well as the main changes, in terms of tax incentives, introduced by the 2019 Budget Law.

by Fabrizio Dalle Nogare

How is the Italian machine tool industry doing? Very well, judging by the results and preliminary results for 2018; well, but with some signs of concern, if we look at the performance of the domestic market or the prospects for the year that has just begun. As a matter of fact, the uncertainty that features both economy and industrial production, combined with the uncertainty that has accompanied the approval of the 2019 Budget Law (see box) can only affect a crucial sector such as, precisely, that of machine tools.
As usual, the data provided by the Studies Department of UCIMU-Sistemi per produrre come to our aid, allowing us to carry out a much more in-depth analysis.
In 2018 production grew to 6,900 million euro, highlighting a 13.4% upturn compared with the previous year. This is the fifth consecutive year of growth and, in terms of absolute values, this is the new record of the Italian industry of the sector. The outcome was due both to the excellent performance of the deliveries by Italian manufacturers in the domestic market, increased by 21.1% to 3,270 million euro, and to the positive trend of exports, up by 7.2% to 3,630 million euro.

Quite a stationary year?
In particular, in 2018, machine tool, robot and automation consumption in Italy grew by 25.9% to 5,620 million euro. Italian users’ propensity to invest in new technology and also in digital products, pushed Italian manufacturers to focus on the domestic market, as proven by the reduction of the export/production ratio, which changed from 55.6% in 2017 to 52.6% in 2018.
Experiencing a non-favourable general atmosphere, in 2019, however the Italian industry of the sector should confirm its 2018 performances, enjoying a positive trend with regard to deliveries in the foreign markets, expected to increase. A clear slowdown is shown by the domestic market, whose growth trend seems to have lost the momentum we were used to over the last few years.
Output will grow to 7,040 million euro (+2%) driven by exports that are expected to grow by 5% and will reach 3,810 million euro. Consumption, i.e. the demand by Italian users, will stop at 5,630 million euro (+0.2%). The stationary situation of the domestic market will affect both the deliveries of Italian manufacturers, which will go down to 3,230 million euro (-1.2%) and imports that will attain 2,400 million euro (+2.1%).
The export/production ratio will gain a percentage point, amounting to 54.1%.
Based on the ISTAT data processing by UCIMU, in the first eight months of the year (latest available survey), the main destination countries for the Made in Italy products of the sector were the following: Germany, 246 million euro (+11.6%); China, 237 million euro (+7.1%); United States, 223 million euro (+9.5%); Poland, 143 million euro (+49.8%) and France, 135 million euro (-4.6%).

Exports are OK, while the domestic market has a slowdown
Even the latest data available, referred to the last quarter of 2018, show quite a stationary situation, on a yearly basis, in machine tool orders compared to 2017 (-0.8%). The comparison between the last quarter of 2017 and the last quarter of 2018 show that foreign orders grew by 2.4%, while on the contrary, Italian machine tool manufacturers registered a 6.3% downturn in the collection of orders.
If it is clear that we are experiencing a slowdown phase, however it is important to consider the jump of Italian machine tool consumption over the last few years. On a yearly basis (2018 over 2017), foreign orders increased by 5.2%, while domestic orders recorded an 11.5% decrease.
“The data of the fourth quarter 2018 are confirming the feeling and the expectations we already had”, said Massimo Carboniero, President of UCIMU. “The year that has just ended was really positive for the Italian manufacturers, who achieved good results both in Italy and abroad. The minus sign regarding the last quarter of 2018 and the whole year should be analysed very carefully: there is no doubt that the collection of orders in the domestic market was weaker than in 2017 and that, consequently, there is a certain slowdown”.
Looking at the future, president Carboniero added: “The positive trend of orders in the foreign markets is an encouraging indication for Italian manufacturers that have proven to be able to work well despite the rather difficult international framework”.