(Finance) – “It is soon to see a significant restart” from the Italian industrial production, which “could be postponed to the second half of 2024 to coincide with the recovery of world trade”. This was stated by the economists of the Studies and Research Directorate of Intesa Sanpaoloafter it emerged this morning that Italian industrial production has started to decline again in October 2023, albeit less than what was expected by consensus, by -0.2% m/m.
It is underlined that therefore the interruption of the fall seen in the previous months was not a sign of a turning point in the cycle. If anything, however, the industry is holding back GDP less than it has in most of the past year. Output is now -3.6% lower than before February 2022 (before the war in Ukraine) and -1% compared to February 2020 (before the pandemic shock).
It is pointed out that the sector dynamics shows that there remains support deriving from the post-pandemic “normalisation”, from which pharmaceuticals and transport continue to benefit, while energy-intensive sectors appear to be suffering of a permanent loss of production capacity following the delocalisation of the most energy-intensive parts of the value chain. On the other hand, the sectors most oriented towards exports suffer from the weakness of global trade, which is struggling to restart, and some sectors (those linked to the production of durable or investment goods) suffer more than others from the drop in demand due to the rise of interest rates.
“The industry it may have passed the trough of the cyclebut an effective restart could be postponed to the second part of 2024 when a reacceleration of world trade should materialize – we read in the research – services have lost much of the boost deriving from the use of extra savings and the post-pandemic normalization of lifestyles, and construction in the coming quarters should be more affected by both the increase in interest rates and the less generosity of construction bonuses (but the expected decline in the residential sector will be attenuated by a non-residential sector which will benefit from the implementation of the works infrastructure foreseen by the PNRR)”.