Italian companies: falling investments and geopolitical uncertainty after duties

These are all signs of a substantial slowdown compared to theoptimism reported by the November-December 2024 outlook of EY Parthenon ceo, according to which almost 90% of world CEOs and 80% of Italian CEOs professed to be confident about economic forecasts. A few months later, the scenario changed to one of caution, even though "in the very last few weeks the markets seem to have metabolised the possibility of finding a balance between protectionist measures and the possibility of agreements", reflects Marco Daviddi, managing partner EY-Parthenon in Italy, albeit with all due caution.

In this context of 'indeterminacy, which for companies can be worse than any decision,' he concludes, the fragilities of the Italian economic system emerge even more clearly, starting with the high cost of energy, which translates into 'less serenity even when dealing with the subject of duties, so as not to totally offload the cost onto the end purchaser, especially in some sectors. Even the latest government interventions,' reflects Daviddi, 'have preferred to favour families over companies.

The possibility of exporting production to the States, depending on duties, is evaluated by several sectors - "even if it appears very complex in the short term" - but 54% of companies are more than anything else exploring new destinations, to try to cushion the impact of possible tariff rules. "For Italian brands, 2025 - the report deduces - will be a crucial year to accelerate geographical diversification".

This then opens up the chapter on the opportunities inherent in every crisis, and Italians confirm - more than the European (39%) and US (43%) averages -

their traditional "high resilience". A resilience that becomes vitality, as proven by "the doubling of M&A volumes of Italian companies in the first four months of 2025 in foreign markets compared to last year," lists Daviddi, "and it is confirmed by the fact that in this first four-month period our GDP was quite in line with the forecasts for the end of 2024: there was no major impact due to protectionist policies, as for example in Germany or the United States.

A pars costruens that makes the worries less gloomy, especially on strategic segments of Italian-made goods, such as food and fashion, cushioned only by the 'momentary relief from the temporary suspension of duties'.

On the other hand, the defence sector is experiencing days of potential growth, rather than of expectation: 'Although the political debate has been very lively and there are still different positions on how to pursue the objectives of common European defence,' the EY report states diplomatically, 'the increase in defence spending in Europe represents a significant opportunity for Italy, which is the third largest producer of military technology in Europe. There are four thousand companies in the supply chain, 90% of which, however, have fewer than 10 employees and only 21 with a turnover in excess of 200 million. 'Companies in the sector should therefore move towards an aggregation process,' the bulletin suggests, 'to be able to support the important investment process expected. With the support of the public sector.