Darkness on industry, production down for 21 consecutive months

Six hundred and eighty-six days. So many have passed since the beginning of February 2023, the start of the long sequence of minus signs that has characterised our manufacturing industry uninterruptedly ever since. In fact, the last increase in industrial production dates back to January last year, a 'plus' sign in the trend data that has now disappeared from ISTAT statistics for 21 consecutive months.

A fall that was initially seen as physiological, in light of previous growth, but which now can hardly be dismissed as an episodic event, given that capacity utilisation has fallen to 75%, the lowest in four years. For a manufacturing industry that closes 2024 in a minor tone, with reduced volumes in almost every area: chemicals, electrical equipment and foodstuffs are the only positive sectors between January and October, the rest of industry goes down.

With negative peaks in particular for textiles-clothing, held back by weak global demand, and for cars, the worst sector of all. Which in terms of cars produced presents bleak data: -41% in ten months, a trend aggravated by -68% in October, the natural outcome of massive recourse to lay-offs and production stoppages. This is a problem for Stellantis but also for the vast related allied industries, as demonstrated by the first cases of redundancies that have already occurred, which then came back after Mimit's intervention.

Paradigmatic cases, fashion and cars, of an industrial sector that is in any case generally struggling, held back by several contextual elements, internal and otherwise. First and foremost, an unfavourable international context, summarised in the slowdown in global trade and the slowdown of several markets, starting with our first partner, Germany.

If the October figures return a little optimism, presenting purchases up by 0.9% in Berlin, the 2024 balance sheet remains largely negative, with a drop of 4.9%, which in absolute terms comes to EUR 3.1 billion in ten months, resources that are missing from company coffers. If, in terms of volumes, car production in Germany is still holding up (+1% to 3.9 million in 11 months), it is the prospects that are worrying, with the dreaded closure of several factories Volkswagen (Audi's plant in Brussels has already decided that it will stop in February) that is causing anxiety among the many Italian suppliers who are counting on German automotive companies to saturate their lines. Uncertainty that in Germany makes 4 out of 10 companies foresee workforce cuts (the big Bosch, Schaeffler and Tyssen-Krupp have already announced them), a crisis also linked to the vertical fall of the construction sector, with building permits halved compared to pre-Covid levels, a descent that sinks a large component, accessories and materials supply chain.