This is how much the German crisis will damage Italian industry. Reports
The Italian and German economies are deeply integrated. The manufacturing sector accounts for more than half of total trade, but industrial production in Germany is slowing down. Here's what a study by the Italian-German Chamber of Commerce says
Germany's economy is in trouble. In July, the latest data show, industrial production – weighed down by the international economic situation and high energy prices – fell by 0.8 percent compared to the previous month, more than analysts expected . In the May-July period, the decrease was even sharper: 1.9 percent less than the previous quarter. The performance of the manufacturing sector and in particular the automotive sector is worrying (here is the in-depth analysis by Start Magazine ).
The health of Germany is important for Italy, given that the country is our first commercial partner: both as an outlet market for our exports and as a territory of origin for our imports. With the roles reversed, the situation is different: Italy is still a crucial commercial partner of Germany, but it is in fifth place in the list of suppliers and in sixth place in the ranking of export destination markets, according to what was reported by infoMercatiEsteri .
HOW IS ITALY-GERMAN TRADE GOING
According to ISTAT data, in 2022 Italy-Germany trade amounted to 168.5 billion euros; in the first quarter of 2023 it was 57.3 billion.
Germany is also the first foreign country in Italy in terms of number of companies, and the third in terms of turnover.
THE IMPORTANCE OF THE MANUFACTURING SECTOR
The Italian-German Chamber of Commerce, in a report dedicated to the bilateral relationship, speaks of an "increased over the years" exchange and of a "mutual interdependence" between Rome and Berlin based on the manufacturing sector, which is worth over half of the total value of exchanges.
“Trade and manufacturing support much of the German presence in our country. Both in exports and imports, steel, chemical-pharmaceutical, machinery and means of transport represent the fulcrum of economic relations between Italy and Germany", writes the Chamber . “These sectors, moreover, are those where the presence of Italian-German companies in the two countries is strongest, which often fuel significant related activities even outside of strictly intended trade”.
The difficult situation of the German industry therefore represents a risk for trade with Italy and for the entire Italian production ecosystem fueled by this exchange. For example, in the period January-May 2023, the chemical-pharmaceutical and steel sectors lost value, going from 14.9 billion to 11.8 billion and from 11.3 billion to 10 billion respectively. According to the forecasts of the Italian-German Chamber, 48 percent of companies fear a drop in demand and 30 percent fear alterations to supply chains. 56 percent of companies think that relations between Italy and Germany should also be deepened through political dialogue.
The Italian-German Chamber of Commerce expects a worsening of the context in the coming months: "a tailwind of the energy crisis […] is grafted onto a recession dynamic for Germany, destined to involve Italy" and the chains of shared value.
THE STATEMENTS
According to Giovanni Baroni, president of the Small Industry of Confindustria Giovanni Baroni, "the two economic systems [Italian and German, ed. ] are so interconnected as to represent a single ecosystem, and therefore integrating strategies and solutions, especially in environmental and digital matters, can be crucial to help businesses cope with a new phase of stress"
According to Paolo Poma, vice president of AHK Italien, “Italian-German trade is constantly growing and the two countries are strongly interconnected […]. The current context, however, can jeopardize our ties, and this is why dialogue, political but also economic, between our two countries is fundamental in this phase, to innovate our production systems by making the transition and preserving the our leading role in European manufacturing".
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/crisi-germania-industria-italiana/ on Sun, 10 Sep 2023 05:08:10 +0000.