Industry Sector Analysis Report October 2023, with Prometeia

Together with Prometeia, Intesa Sanpaolo presented the Industrial Sector Analysis Report October 2023, which examines the performance of Italian manufacturing companies in the first seven months of 2023.

In the light of the excellent financial results in 2022, the Report shows that Italian manufacturing has the resources needed to continue to invest in competitive strengthening, even in a challenging, risk-intensive 2024-25 scenario.

Moreover, one of the main findings of the analysis concerns the top-performing companies in terms of margins: these are companies that have focused on key strategic levers, from technological innovation to brands, from foreign direct investment to self-generation of electricity through plants powered by renewable sources, confirming the crucial importance of the energy variable in order to better cope with periods of high uncertainty and volatility.

The Report provides scenario analyses and forecasts of growth and profitability potential for around 40 sectors, grouped into 15 categories.

Highlights from the Industry Sector Analysis Report October 2023 are provided below:

• Italian industry closed 2022 with excellent financial results. As the analysis of a sample of about 40,000 companies shows, growth was robust and spread across all size classes.
• The competitiveness of Italian companies in high-end and high-tech niches ensured the resilience of Italian exports (growth of 3.6% at current values in the first seven months of 2023, stable at constant prices), despite the slowdown in world trade, with positive effects on the balance of trade. The export rate will remain at levels persistently above 50%, allowing the trade surplus to exceed €106 billion in 2025.
• The impetus provided by the foreign channel and the continuing intense inflationary pressure in 2023 will keep turnover of Italian industry at current levels, and it is expected to reach an all-time high at €1,169 billion at the end of the year.
• Sectors related to the digital and energy transition will end 2023 in positive territory, even at constant prices, against a deflated turnover down by -0.6 % at the level of the manufacturing aggregate: Cars and Motorcycles (+7.9%, rebounding from the lows of previous years), Electronics (+2.9%) and Electrical Engineering (+2%); turnover in Mechanical Engineering was stable (+0.3%). FMCG (+2.7%) and Pharmaceuticals (+2.5%) will also come in at the top of the rankings, thanks to greater resilience on international markets.
• The greatest difficulties will be experienced by producers of intermediates, in particular Chemical Intermediates (2023 deflated turnover -7.8%), Construction Products and Materials (-4.6%) and Metallurgy (-3.3%), penalised by the weaker dynamics of residential construction and prudent restocking. Also on the decline were manufacturers of durable goods for the home (Household Appliances and Furniture, after the surge during the pandemic years), the Fashion Industry and Food and Beverages, which on the domestic market suffered the impact of budget constraints on household spending.
• In 2024-25 the sectors related to the double transition will continue to enjoy the best prospects, supported by European funding from NGEU. Manufacturing as a whole is expected to grow at an average annual rate of less than 1% at constant prices, within a scenario in which restrictive monetary policies and geopolitical tensions will continue to constrain the recovery of demand.
• In view of the increasingly challenging prospects facing companies, investments in strengthening competitive positioning are essential. As the analyses for the four-year period 2019-22 presented in the Report show, the top-performing companies in terms of margins are those that have focused more than others on key strategic levers, from technological innovation to brands, from foreign direct investment to self-generation of electricity through plants powered by renewable sources, confirming the crucial importance of the energy variable in order to better cope with periods of high uncertainty and volatility.