Industry, production still down Free fall in textiles and footwear

The slowdown continues for Lombard manufacturing, 13,900 enterprises employing 650,000 people, 45% in mechanics: for the industry in the second quarter of 2024, production was down by -0.7% in the second quarter and -1.2% annually, while turnover was up by 0.2%. Growth for sectors such as chemicals (+3.8%), rubber-plastics (+2.7) paper-press (+2.3%) and non-metallic minerals (+2.6%) still driven by construction. On the other hand, there was a sharp contraction for leather-footwear (-11.2%) and textiles (-11.1%). Transport equipment (-3.7%), iron and steel (-2.6%), mechanics (-2%), clothing (-1.6%), and wood-furniture (-1%) were also down.

The trends emerge from the latest Unioncamere Lombardia economic survey. Causing the slight downturn, it was stressed, was the "persistent weakness of demand" both domestic (+0.4% compared to the previous quarter) and foreign (-0.3%). Energy costs are still reported as one of the major factors of uncertainty, while there is an expectation of a gradual reduction in interest rates and a drop in the cost of raw materials, factors that could favour a recovery.

"The manufacturing sector in Lombardy is suffering from the negative trend in world trade and the weakness of domestic demand, but the employment figures are still positive," commented Gian Domenico Auricchio, president of Unioncamere Lombardia, at the presentation, also emphasising the propensity of companies towards new technologies. With regard to artificial intelligence, '23% of industrial companies and 7% of artisan companies already use it or plan to implement it soon. Of these, more than 50% consider it a decisive factor for increasing profitability. However, the availability of suitable professionals for the new technologies remains critical'.

"Lombardy's industrial production continues to be weighed down by the complex and unstable global context, which at this stage is bringing out all the weaknesses of European industry," confirmed Francesco Buzzella, president of Confindustria Lombardy, adding: "What worries Lombardy's entrepreneurs most of all is the German structural crisis: it is clear that, having lost the leverage guaranteed by the supply of cheap gas, the margins of competitiveness have been drastically reduced. Giovanni Bozzini, president of Cna Lombardia, agrees: 'It is a stability in uncertainty. The fundamental parameters of growth are experiencing a relative improvement compared to the pandemic period, but we are inside the horizon of a growth weakened by a series of numerous geopolitical and geo-economic unknowns: the Russian-Ukrainian front, Israeli-Palestinian tensions, and instability in the Suez Canal area'.

Guido Guidesi, Lombardy Region's councillor for economic development, emphasised the priorities on which solutions need to be found at several levels: energy costs and access to credit. He also recalled the need for companies to remain competitive while complying with the sustainability rules that Europe has imposed on them, especially for sectors that have invested in transition, such as the steel industry: 'We are asking Europe for flexible answers that can allow our products to be competitive. It means from a financial point of view intervening so that our positioning is fair, not going back on green'.