PIEMONTE'S INDUSTRIAL PRODUCTION STARTS UP AGAIN, BUT THE EMPLOYMENT FACTOR WEIGHS ON RECOVERY
The economic-financial crisis that hit the world economy over the two years 2008- 2009 seems to have slowed down, leaving room for a slow recovery. The encouraging signs that have been intensifying over the last few quarters are, in fact, also confirmed by data from the early months of 2010. In general there is a gradual stabilisation of the main economic indicators both for the international and Italian markets. Despite these comforting signs, it is however difficult to predict how the markets will evolve when the effects of the anti-crisis measures decided by the various governments finish. The forecasts of the main international research institutes indicate, in fact, that there will be a slow and progressive recovery of production but many years will pass before returning to pre-crisis levels.
In the framework of the evolution of the international situation at the beginning of 2010 we are seeing a more marked recovery in Asia and some emerging countries, in an overall context that still appears dominated by a strong degree of uncertainty.
On the basis of the Eurostat data for the first three months of 2010, it emerges that the GDP for the Eurozone grew by 0.2% compared to the previous quarter and 0.5% compared to the first quarter of 2009. Focusing attention on the main economies of the Eurozone, it can be noted how the trend in GDP compared to the first quarter of 2009 was higher than the average for Germany (+1.5%), France (+1.2%) and for Italy it was slightly lower (+0.6%), while the figure for Spain was still negative (-1.3%).
The continuation of the positive trend of the beginning of the year is supported by the forecasts formulated by the OECD for the two year period 2010-2011. On the basis of the scenarios predicted in the Economic Outlook of April 2010, the GDP of the OECD area should grow by 2.7% in 2010 and 2.8% in 2011. Less intense growth is, instead, expected for the Italian economy, stopping at 1.1% in 2010, and 1.5% the following year. However, news from the labour market is contributing to making the mid-term prospects more uncertain and delicate. In our country, the unemployment rate should rise to 8.7% in 2010, and to 8.8% in 2011, against the 7.8% recorded in 2009. The situation of the Italian labour market is in fact destined to become more critical because of the disappearance of the social "cushions" that have offered families and businesses fundamental support during the crisis. The employment problems could have an effect on the real economy, leading to a reduction in consumption which, in turn, could lead to a fall in production, with the consequent drop in the need for manpower.
INDUSTRIAL PRODUCTION IN PIEMONTE
% variation in production compared to the same quarter of the previous year
% variation in production compared to the same quarter of the previous year
Source: Unioncamere Piemonte, 154a Indagine congiunturale sull'industria manifatturiera piemontese
The recovery thus still appears fragile and will have to be underpinned by shrewd industrial policies aimed at supporting the transformation and innovation of the local economic fabric.
The national figures show how the growth trend in the gross domestic product in the first quarter can be put down to the increase in the added value of agriculture, industry and services. These first figures indicate how Italy has already shifted into "recovery mode", although industrial production, even if accelerating, is still far from the maximum levels of the pre-crisis period.
In the period of January-March 2010 the Italian manufacturing sector recorded an increase in production compared to the same period of 2009 of 2.8%, a percentage that rises to +3.1% if the figures are adjusted for calendar effects. The seasonally adjusted figures show, instead, a positive variation of 1.4% compared to the last three months of 2009.
The recovery thus still appears fragile and will have to be underpinned by shrewd industrial policies aimed at supporting the transformation and innovation of the local economic fabric.
The national figures show how the growth trend in the gross domestic product in the first quarter can be put down to the increase in the added value of agriculture, industry and services. These first figures indicate how Italy has already shifted into "recovery mode", although industrial production, even if accelerating, is still far from the maximum levels of the pre-crisis period.
In the period of January-March 2010 the Italian manufacturing sector recorded an increase in production compared to the same period of 2009 of 2.8%, a percentage that rises to +3.1% if the figures are adjusted for calendar effects. The seasonally adjusted figures show, instead, a positive variation of 1.4% compared to the last three months of 2009.
INDUSTRIAL PRODUCTION IN PIEMONTE BY SECTOR
% variation I quarter 2010 / I quarter 2009
% variation I quarter 2010 / I quarter 2009
Source: Unioncamere Piemonte, 154a Indagine congiunturale sull'industria manifatturiera piemontese
Concentrating attention on the trend in indicators for the start of the year at the regional level, it emerges that the crisis, which had hit the local economic system at the end of 2008, seems to have finally weakened its grip on Piemonte's economy. In the first quarter of 2009 the critical factors that had affected the local economic system had assumed the traits of a full-blown, generalised recession of the regional economy; the effects of this crisis also extended to the other quarters of 2009, even if rather softer compared to the early months of the year. 2010 opened, instead, with a positive sign. In the period January- March 2010, the trend of the variation in Piemonte's industrial production was, in fact, +9.3%. The positive performance of the regional manufacturing fabric should, however, be evaluated with the greatest caution, in the light of the fact that the comparison of the output in January-March 2010 was made compared to the level of production in January-March 2009, the period when the regional economy was deep in the trough of the crisis.
Encouragement can be drawn from the fact that the recovery does not seem circumscribed to some specific sectors but that slowly all branches of industry are showing stabilisation if not a return to positive figures.
The encouraging performance shown by the local production system stems from the good results from all the main sectors of the regional economy. The electricity and electronics industries (+31.7%) recorded an increase in industrial production well above the regional average, as did the chemicals, rubber and plastics sector (+16.8%). Means of transport, confirming the signs of recovery visible in the last quarter of 2009, has seen an increase in the trend in production of 13.9%. The production of metals and metal products is also positive (+7.7%). The food sector, which had shown falls in production lower than the regional average for all of 2009, recorded an increase in output of 4.8%; the increase for the textile industry was of a comparable level (+4.3%), while the growth in the engineering industry was just under one per cent (+0.7%).
According to the 154a Indagine congiunturale sull'industria manifatturiera piemontese conducted by Unioncamere Piemonte in collaboration with the research offices of the provincial Chambers of Commerce, the performance of the regional manufacturing fabric is associated with results in part less encouraging recorded by other indicators: orders from the domestic market suffer a fall of 0.4% compared to the previous quarter, while those from abroad drop by 1.7%. On the other hand, turnover appears to be increasing.
Looking to the future, confidence returns amongst Piemonte's entrepreneurs. Following a fourth quarter of 2009 characterised by a significant downsizing of pessimism, in the first quarter of 2010 the entrepreneurs depict a decidedly rosier panorama for the six month period of April-September of the year for the main indicators of the economic situation, within which, as was underlined earlier, some critical points remain.
Extending the forecasts to all of 2010, Piemonte also sees a slow recovery in production. Piemonte's GDP will rise by 0.9% in 2010 by 1.0% in 2011, to then speed up the rhythm of development in 2013. Domestic demand will remain weak for all of the current year (+0.2% compared to 2009) and will grow slowly in the following two years. It will instead be foreign demand that will fuel industrial recovery the most.
Concentrating attention on the trend in indicators for the start of the year at the regional level, it emerges that the crisis, which had hit the local economic system at the end of 2008, seems to have finally weakened its grip on Piemonte's economy. In the first quarter of 2009 the critical factors that had affected the local economic system had assumed the traits of a full-blown, generalised recession of the regional economy; the effects of this crisis also extended to the other quarters of 2009, even if rather softer compared to the early months of the year. 2010 opened, instead, with a positive sign. In the period January- March 2010, the trend of the variation in Piemonte's industrial production was, in fact, +9.3%. The positive performance of the regional manufacturing fabric should, however, be evaluated with the greatest caution, in the light of the fact that the comparison of the output in January-March 2010 was made compared to the level of production in January-March 2009, the period when the regional economy was deep in the trough of the crisis.
Encouragement can be drawn from the fact that the recovery does not seem circumscribed to some specific sectors but that slowly all branches of industry are showing stabilisation if not a return to positive figures.
The encouraging performance shown by the local production system stems from the good results from all the main sectors of the regional economy. The electricity and electronics industries (+31.7%) recorded an increase in industrial production well above the regional average, as did the chemicals, rubber and plastics sector (+16.8%). Means of transport, confirming the signs of recovery visible in the last quarter of 2009, has seen an increase in the trend in production of 13.9%. The production of metals and metal products is also positive (+7.7%). The food sector, which had shown falls in production lower than the regional average for all of 2009, recorded an increase in output of 4.8%; the increase for the textile industry was of a comparable level (+4.3%), while the growth in the engineering industry was just under one per cent (+0.7%).
According to the 154a Indagine congiunturale sull'industria manifatturiera piemontese conducted by Unioncamere Piemonte in collaboration with the research offices of the provincial Chambers of Commerce, the performance of the regional manufacturing fabric is associated with results in part less encouraging recorded by other indicators: orders from the domestic market suffer a fall of 0.4% compared to the previous quarter, while those from abroad drop by 1.7%. On the other hand, turnover appears to be increasing.
Looking to the future, confidence returns amongst Piemonte's entrepreneurs. Following a fourth quarter of 2009 characterised by a significant downsizing of pessimism, in the first quarter of 2010 the entrepreneurs depict a decidedly rosier panorama for the six month period of April-September of the year for the main indicators of the economic situation, within which, as was underlined earlier, some critical points remain.
Extending the forecasts to all of 2010, Piemonte also sees a slow recovery in production. Piemonte's GDP will rise by 0.9% in 2010 by 1.0% in 2011, to then speed up the rhythm of development in 2013. Domestic demand will remain weak for all of the current year (+0.2% compared to 2009) and will grow slowly in the following two years. It will instead be foreign demand that will fuel industrial recovery the most.