Home » War effect. Wood, plastic and metals: this is where Italian industry stopped (by C. Paudice)

War effect. Wood, plastic and metals: this is where Italian industry stopped (by C. Paudice)

by admin
War effect.  Wood, plastic and metals: this is where Italian industry stopped (by C. Paudice)

In the end, despite the easy enthusiasm for an economic growth hitherto more brilliant than the European average, the effect of the energy war waged with sanctions against Russia was also evident in Italian industrial activity. The manufacturing production recorded by Istat in the April surveys is a vertical collapse. The dizzying increase in bills in recent months has produced cascading effects on the entire economic system, and even if they have been slow in manifesting themselves, they are now increasingly evident. It is in fact the fourth consecutive monthly drop but April is certainly the deepest drop since July 2020, i.e. when the pandemic and the lockdowns caused a cardiac arrest in production.

In fact, in April the seasonally adjusted index saw a drop of 1.9% compared to the previous month, “with decreases extended to all the main sectors”. The picture is also negative on a quarterly basis and on an annual basis, net of calendar effects, a “significant fall” of 7.2% is observed. At the sectoral level, the decrease for energy (-12.6% per year) and intermediate goods (-11%) is very large; consumer goods see a reduction of 7.3% while the decrease for capital goods is limited (-0.2%).

The braking is therefore the most extensive for almost three years. To find a higher drop, in the data corrected for the calendar, you have to go back to July 2020, in phase 2 of the pandemic emergency, when the drop was 8.3%. However, the Meloni government is not upset and indeed motivates the collapse with the effects of the retreat of Germany, the first European economy that has just entered a recession after having recorded two consecutive drops in gross domestic product. “Italy has grown even more than Germany” and from this, said the Minister of Enterprise and Made in Italy Adolfo Urso, consequently “the negative data on industrial production” arises because we are “a large exporting country in Europe and also in Germany, we are integrated with the German productive fabric and therefore we know that when Germany is in difficulty this has repercussions on the entire production chain”.

See also  Apple iPhone 13 series is expected to cut prices for the first time in 14 years | XFastest News

The most marked declines were recorded in the metallurgy, chemical, electricity and gas supply, wood and paper sectors. These are the sectors that are most affected by the high bills that the industry has witnessed in recent months. High energy costs inevitably led to production cuts. In the area that uses steel, the only smiles are the manufacturers of means of transport +(6.7%) and motor vehicles and components, which on an annual basis in April saw growth of 4.9%, according to the processing of Istat data by Federacciai. Mechanics saw a decline of 1.6%, the production of electric motors by 1.4% compared to April 2022, metal goods by 9.9% and that of household appliances even came close to 16%.

The food, beverage and tobacco industry, particularly affected by inflation also on the consumer side, contracted by 5.6%. Textiles, including clothes, leathers and accessories, according to Istat sector data, fell by 8.6%, demonstrating that when there is a crisis, clothing is the first to suffer. But the sector that has suffered the greatest pains due to the vertiginous increase in prices and bills is that of wood, paper and printing. It is in fact classified as highly energy intensive: the paper industries run machinery in a continuous cycle, using large quantities of water. But then the paper must be dried with the steam produced by the methane.

It is a sector that has not known peace for two years now. In mid-2021, following the reopenings and the rise in raw material costs, it had to deal with exorbitant increases in supplies. In fact, in mid-2021 cellulose used to produce paper and cardboard underwent price increases of 60% (Nbsk long fibre) and 70% (eucalyptus short fibre), reaching respectively 1,350 dollars/ton and 1,150 dollars/ton. After the blow from raw materials, then came that of energy which gradually saw the cost rise up to unsustainable prices during last summer. And it is a particularly important sector in Italian manufacturing: in 2020 the paper industry had a turnover of 6.3 billion euros, of which 23% generated by the tissue paper production sector (hygienic-sanitary), for a total of 8.5 million tons of which about 20% tissue. Italy is the leading European producer of tissue paper with a share of 20.4%, more than Germany (19.3% at EU level). The entire sector employs almost 19,000 employees.

See also  Intel Core processors change names

Then there was a decline in the manufacture of electronic products, computers, optics, watches, as well as electrical equipment or articles in rubber and plastic materials. Furthermore, as can easily be understood, suppliers of electricity, gas and steam recorded a slowdown of 13.6%. Overall, manufacturing activities marked a sharp decline compared to a year ago by 2%.

The trade associations are already talking about a Caporetto of Italian industry which will not be slow to reveal itself on the still positive projections of the country’s economic growth. Partly because the effect of the credit crunch implemented by the European Central Bank to curb inflation will continue to produce the cooling of the economy that is necessary, according to the political decision-makers, to stop the price race. On the other hand because the energy crisis is not over yet. The cost of methane, to which that of electricity is closely connected, has dropped markedly compared to the hottest periods of the energy crisis following Russia’s invasion of Ukraine and the subsequent cut in methane supplies. But it has not yet returned to pre-crisis levels, and it is not excluded that it could rise again. Today, natural gas on the square in Amsterdam has jumped again due to the effect of the summer heat, which leads to the forecast of a greater consumption of electricity for air conditioners and therefore an increase in the demand for methane. Futures contracts for the month of July gained 20.02% to 32.34 euros on the TTF market in Amsterdam.

You may also like

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Privacy & Cookies Policy