Italians look back on a positive year

The Italian trade association Acimall reports a satisfactory 2018 financial year with good sales – even though the last quarter has raised some questions in terms of economic research.

This year, too, the association, which represents Italian manufacturers of woodworking machinery and tools, speaks of a "barometer that continues to show good weather for the furniture industry and thus also for sales of woodworking machinery and equipment". In 2017 sales grew by 11.6 percent compared to 2016, and in 2018 sales were still up by 9.5 percent compared to the pleasing balance from 2017. And there is nothing to suggest that the 'stable high' will change so quickly," the association says.

Sales in 2018 ultimately amounted to around 2.49 billion euros, compared with 2.27 billion euros in 2017. Exports contributed 1.69 billion euros – an increase of 6.5 percent – to this result.

Imports worth 239 million euros, an increase of 27.9 percent (2017: 187 million euros), are also seen as an indicator of continued stable sales on the Italian market. The foreign trade balance amounts to 1,455 million euros (+ 3.8 %).

"The government's subsidies for investments in innovative production technologies and 'Industry 4.0' certainly also contributed to the good performance of the sector last year," says Acimall.

Considerably less optimism is aroused by the analysis of the last quarter of 2018: a slight decline in incoming orders for Italian machines and technologies can be seen here. This is less the case for the Italian market, which is more than satisfied with an increase of 17.9 percent compared to the fourth quarter of 2017. On the other hand, incoming orders from abroad fell by 13.6 percent. All in all, this led to a 3.2 percent overall decline in orders from October to December 2018. The interpretation of this is increasing uncertainty on the international stage, for example the threat of "Brexit" and trade disputes between China and the USA, which lead to a reluctance to buy or at least to more caution on the part of foreign investors. Sales in this quarter were largely unaffected by the decline in orders in the fourth quarter, with an increase of 19.2 percent. As a rule, declines in orders due to the delayed delivery of machines and systems only have a later impact.

Acimall collects additional data on a regular basis; the order backlog in the fourth quarter of 2018 was ultimately 3.7 months compared with four months in the third quarter. In terms of price increases, there was a slight increase of 1.1 percent in 2018 - just as in 2017.

And what do the individual companies think about the production trend? 38 percent of the respondents believe in a positive trend, 56 percent expect stability as far as possible, six percent expect a deterioration.

With regard to the short-term forecast, many survey participants express certain concerns: how, for example, the domestic market will change if the tax breaks for new production facilities in the now effective state budget are reduced and at the same time the fund for tax refund claims for investments in research and development is also reduced. The possibility of a "super depreciation" will even be completely eliminated in Italy from 2019. All this will certainly have consequences, in some cases it may even have led to early investments in recent years.

Many respondents are also concerned about the influence of global political decisions. All in all, only six percent of the respondents trust in a growth of the domestic market, while 63 percent expect stability and 31 percent expect a decline. When it comes to exports, 19 percent are optimistic, 18 percent pessimistic and 63 percent believe that sales will remain constant.