(Finance) – In 2022, the turnover recovery phase started in 2021 continued for the Italian electrical cables and conductors industry. The companies closed the year with a aggregate turnover of 6.6 billion euros and exports of 3.8 billionAfter the sustained growth trends in the previous two years, the cable industry has recorded a slowdown in the current year. However, this is a trend of a cyclical nature, because in the medium term the cable sector, which enables the driver technologies of the ecological and digital transitions, will guide the development of manufacturing, together with the macro sectors of electrical engineering and electronics.
In 2023, industrial activity volumes in the Electrical Cables and Conductors sector recorded a trend reversal, also accompanied by a slowdown in turnover in value. These dynamics are part of a general slowdown that has affected the manufacturing industry starting from the summer months of last year. This is what emerges from Sector data report of the Electrical Cables and Conductors Industry born from the collaboration between the Research Service and the AICE Association of ANIE Federation. The study also presents an analysis of companies’ financial statements for a six-year period (2016-2022), a period which also allows us to glimpse structural trends of a sector which, despite the pandemic and the difficulties of the competitive context, has seen an important strengthening of the productive fabric in Italy.
The volume has been presented by the AICE Association on November 13th on the occasion of the annual convention with members held in Milan. The event entitled “Challenges of the economic scenario and prospects for the Italian cable industry” saw the participation as keynote speaker of Professor Carlo Cottarelli, Director of the Program for Education in Economic and Social Sciences of the Catholic University of the Sacred Heart of Milan, which provided an interesting macroeconomic framework both from a historical perspective and with regard to forecast scenarios.
“The data for the first half of 2023 are part of a general slowdown in the manufacturing industry starting from the summer months of last year. The cost of raw materials, in particular metals such as copper and aluminium, a slowdown in investments in construction and, in general, a restrictive monetary policy mainly due to geopolitical tensions. The sector also felt the phenomenon of dumping from China. The EU imposed duties on the import of fiber optic cables from China, following an initiative coordinated by Europacable, European reference association, in which European producers and national associations participated, including ANIE AICE”, is the summary of Marcello Del Brenna, President of AICE – Italian Association of Electrical Cable and Conductor Industries, federated by ANIE.
Trends in industrial production and turnover in 2023
In 2023, industrial production volumes in the electrical cables and conductors sector recorded a trend reversal (-5.6% trend decrease in the January-August period). The decline is more marked both compared to the manufacturing average (-2.1%) and in comparison with the trend recorded by the electrotechnical macro-sector (-0.6%). The trends in the sector are impacted by the slowdown in investments in construction and the changed investment decisions by utilities, together with the slowdowns shown by the main industrial customer sectors.
The turnover in value also showed a progressively weakening trend. After a still stable start to the year, in the second quarter the expansionary profile of turnover underwent a trend reversal, recording a decline of 7.1% in value compared to the corresponding period of 2022. The data, although incomplete, on the third quarter of 2023 show substantial stability, leading the cumulative change in turnover for the period January-August 2023 to mark a trend decline of 1.4% (+7.3% average growth in electrical engineering, +0.4% in manufacturing ).
Foreign demand in 2023
After the strong rebound experienced in 2021, i2022 highlighted the maintenance of a positive tone for the dynamics of foreign trade of electrical cables and conductors, which saw exports grow by 13.5%. The trade balance at the end of the year stood at 2.7 billion euros (2.4 billion euros in 2021). The first six months of the current year showed a significant deceleration, which led to a trend reversal for foreign sales (-0.7%). These trends undoubtedly reflected a slowdown in international demand, both in the EU and non-EU areas.
Medium-term scenario: driving effects of innovation
The scenarios for the manufacturing industry released in November by the Research Office of Intesa Sanpaolo and Prometeia indicate that the electrotechnical and electronics sectors, including cables, will drive the growth of the Italian manufacturing industry in the two-year period 2024-2025. Demand remains favorable in the medium term, driven by investments in the energy and digital transition, drivers of global growth in the coming years.
“Cables are the backbone of electricity and communication networks, because they “transport” the energy and digital transitions, enabling the most strategic technologies. The growth prospects of our sector are positive. The Italian manufacturing hub is an international excellence with a consolidated leadership in technological innovation. Generation from renewable sources which is increasingly dominant in the energy mix, the development of networks, the electrification of energy consumption and digitalisation require high-performance, innovative, sustainable and safe cable systems. While on the research and development, our companies oversee the businesses with the highest added value, with a progressive integration of ESG objectives across the entire supply chain. Sustainability is the key factor for the creation of value”, underlines Del Brenna.
2022, the numbers in summary
Total turnover of the electrical cables and conductors industry represented by ANIE AICE in 2022 is 6.566 billion (5.705 in 2021; 3.650 in 2020). The domestic market is worth 3.877 billion (3.290 in 2021; 2.174 in 2020); exports 3.839 billion (3.383 in 2021; 2.188 in 2020). The impact of exports on turnover is 58.5% in 2022 (59.3% in 2021; 60% in 2020). While the trade balance balance is +2.689 billion (+2.415 in 2021; +1.476 in 2020). The distribution of the aggregate turnover by product groups – of 6.566 billion euros in 2022 – is broken down as follows: low voltage energy cables (72.5%), medium and high voltage energy cables (6.8%), for electronic communications (8.9%), conductors for electrical windings (11.8%).
The distribution of exports by product group is a total of 3.839 billion euros, broken down as follows: low voltage energy cables (70%), medium and high voltage energy cables (9%), electronic communications cables (7.2% ), conductors for electrical windings (13.7%).