Istat photograph on the competitiveness of the productive sectors: this is how the pandemic and the crisis have affected our economy
The "Report on the competitiveness of productive sectors 2023" elaborated by Istat and now in its eleventh edition has been released a few days ago. a well-known series of events and circumstances.
The consequences of the Russian-Ukrainian conflict on the cost of raw materials and the energy crisis are factors that have added to an unstable economic situation, which had just started its recovery after the pandemic era and the related consequences.The aftermath of the pandemic and price increases are in fact the main factors which, in the last two years, have influenced the competitive strength of companies.
However, the picture that emerges on the production system is less drastic than one might expect in conjunction with two crises so consistent and close to each other. A result probably due to the huge amount of aid provided by the government to support companies, which helped to limit much worse damage, given the collapse of GDP by 9% in 2020.
This chain of crisis episodes has led the production system to sudden changes of scenery. At first the companies had to deal with a slowdown, then with a slow recovery phase, characterized by uncertainty, finally they had to deal with a further change of strategic orientation, switching expansionary initiatives with more cautious and defensive behaviors, with a view cost containment and the negative effects of incipient inflation.
Even though Istat remarks that the statistical data currently available are not yet able to offer in-depth analyzes on how the business system is reacting to the generalized increase in production costs, some signals are already discernible. Despite the seriousness of the impact of the energy crisis, the 'Institute reports that, at the end of 2022, Italian companies did not see any serious operational risks for their business, at least in relation to the first half of 2023. In percentage terms, the forecasts of companies in the manufacturing and services sector were in fact significantly better than the post-pandemic interviews of 2019.
Also in terms of suspension of activities, unlike what happened in the pandemic period, only a small percentage of companies were forced to suspend following the increases in energy raw materials, almost always offset by an increase in sales prices. This does not has however avoided a widespread reduction in profit margins: between the beginning and the end of 2022, the gross operating margin (GOM) decreased for more than half of the companies in eighteen out of twenty-three sectors and in 5% of cases it even became negative.
In the tertiary sector, the ability to offset increases in raw material costs through price increases is, on the other hand, more limited and cases of reduction in profit margins are therefore more frequent. In particular, in services, a more frequent orientation towards saving and energy efficiency emerges, which is accompanied by greater negotiating power in supply relationships and in the renegotiation of contracts, which are easier in cases where the company belongs to multinational groups.
Keeping the focus on the personal services sector, the report shows how the employment effects of the pandemic are also visible in this sector, especially on sports and entertainment activities, which recorded -2.6%, and lotteries, bets and casinos, which instead recorded -2.1%.
“Although the public gaming sector has reacted promptly and effectively to the market downturn caused by the pandemic, some disruptions have occurred, especially in relation to the land-based sector”, commented Natalia Chiaravalloti of Giochidislots , the sector information portal. “The prolonged closures of land-based gaming points have led many small entrepreneurs to drastic solutions and to the reduction of existing staff and this has certainly been one of the main problems of the sector, which, however, is being tried to remedy, through policies to relaunch also in omnichannel optics ”, continues the Giochidislots expert.
Istat data shows that the entertainment sector is one of those still far from recovering the pre-pandemic levels of 2019 (still at -7.6%). However, within this macro-category, public gaming is certainly the division that is reacting the fastest, confirms Chiaravalloti of Giochidislots, who comments " 2022 was, to all intents and purposes, the year of relaunch for the public gaming sector , as confirmed by the various reports drawn up by the ADM Agency. The data highlights a 30% growth of the entire supply chain in 2022, with a recovery also of the retail division, the most penalized by the global situation
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The article Istat Photography on the competitiveness of productive sectors: this is how the pandemic and crisis have affected our economy comes from Scenari Economici .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/fotografia-istat-sulla-competitivita-dei-settori-produttivi-ecco-come-pandemia-e-crisi-hanno-influenzato-la-nostra-economia/ on Mon, 24 Apr 2023 16:30:48 +0000.