Istat: German recession and high rates, the risks for the competitiveness of Italian companies

The weight of the pharmaceutical sector is increasing

Compared to 2019, the sectoral composition of Italian exports in volume has not undergone significant changes. Pharmaceuticals increased its weight on the total (+1.3 percentage points), positioning itself in third place in 2023 after Machinery (-1.3 pp) and Motor Vehicles (-0.4 pp). The weight of some Made in Italy activities (Textiles, Clothing and Leather) is also decreasing. Over half of 2023 manufacturing exports went to seven countries (Germany, France, the United States, Spain, the United Kingdom, Russia and China). The United States, which increases its weight on the total, is the first market for beverage products (absorbing 20.9% of exports in this sector), other means of transport (12.3%) and pharmaceuticals (21.3%); Germany for those of Motor Vehicles (18.5%), Metallurgy (20.0%) and Electrical Equipment (15.5%); France for Clothing (13.3%), Leather (17.7%), Wood (16.7%) and Furniture (19.3%) products. Imports in manufacturing value suffered a contraction in 2023 (-2.1%), larger for Coke and refining (-18.7%), Metallurgy (-18.2%) and Paper (-15.5% ). In volume, total imports increased in only three out of 22 sectors, in particular in Motor Vehicles (+23.3%).

The weight of multinationals, 76% of exports

Multinational companies have a substantial weight on manufacturing trade, which has not changed with the pandemic: already in 2021 they accounted for 76.1% of exports (the share of those under Italian control was 41.3%, it was 35% in 2019) and over 80% of imports (35.4% those under Italian control). The foreign subsidiaries predominate in exports of high or medium-high technology sectors: 70% for Automotive and Pharmaceuticals; over 40 for Electronics, Electrical Equipment and Other Manufacturing; Italian multinationals prevail in the Metallurgy (53.0%), Other means of transport (62.0%), Made in Italy (Wood, Clothing, Textile, Furniture, Food) and Machinery sectors, with shares of around 40%. %. In imports, the role of foreign subsidiaries is even greater (they prevail in 13 out of 22 sectors). In the sectors of Pharmaceuticals, Leather, Chemicals, Electrical Equipment and Other manufacturing industries, approximately a quarter of exports are generated by subsidiaries in five countries (United States, China, Germany, France, United Kingdom); those under US control explain 46.1% of pharmaceutical exports.

The eight supply chains of “systemic importance”

The results of the second permanent business census provide information on the involvement of companies with at least three employees in the production chains. 80% of units (two thirds of large companies) participate in just one supply chain. The supply chains that involve multiple companies are those of Agri-food, Construction, Tourism and Road transport. An indicator of “systemic relevance” identifies eight highly systemic supply chains (i.e. with a greater capacity to impact the overall dynamics of the system): Agri-food, Road transport, Energy, Construction, Clothing, Industrial machinery (non-dedicated), Pharmaceuticals and care of people, animals and homes, Healthcare. The companies in these supply chains generate 56.4% of the added value and 52.3% of the total employment of units with at least three employees.

Exports from the South are increasing but differentiated: Campania and Calabria are doing well, Sicily and Sardinia are doing badly

In 2023, the stationarity in value of the national export of goods reveals differentiated territorial dynamics: strong increase for the South (+16.8%), more limited for the North-West (+2.7%), and declines for the North-east (-1.0%), the Center (-3.4%) and above all for the Islands (-21.0%). The three regions with the highest export increases (Campania +28.9%, Molise +21.1%, Calabria +20.9%), and the two regions with the largest declines (Sardinia -24.2% and Sicily -19.3%) are in the South. For most of the 2019-2023 period, the northern regions provided the highest contribution to the change in value of national exports; in 2023, on average for the year the only positive contribution to national exports comes from the Southern regions. In years in which extra-economic and geopolitical events have strongly influenced foreign trade flows, greater diversification of outlet markets and the variety of exported goods can constitute a factor of resilience on international markets; on the contrary, a greater product and geographical concentration of sales can represent an element of risk or reduced capacity for rapid reorientation of flows.

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