Italy's machinery falls: domestic demand down 17 per cent

"A measure that arrived late and badly, with too much time lag between the announcement and the operational rules: thus, while waiting, the market came to a standstill". For Bruno Bettelli, President of Federmacchine, the impasse over Transition 5.0 is one of the key reasons to explain the fall in the domestic market, which according to the Federation's estimates has fallen by over five billion, or 17.4%. Domestic equipment consumption thus falls to 25.2 billion, back below 2019 levels. Forecasts revised downwards, as has happened for almost every indicator of the national economy, because if last June Federmacchine's estimates aimed at close to 55 billion in revenues (a drop of just over three points compared to the previous year), now they are down to 52.2, with a more than double reduction: -7.8%.

Decisive for the vast area of national plant engineering (12 business associations, over 200,000 employees) is the stagnation of investments in Italy. Because while exports are not brilliant, falling just under four points, it is the domestic market that is taking the most work away from companies, as already highlighted in the figures for machine tools: the fall in domestic demand is well into double figures, a slowdown that affects importers the most (-20.3%) but not too dissimilar also domestic deliveries (-15.5%).

'Certainly,' adds Bettelli, 'the external context is not helping at this stage either, with rates remaining high and global uncertainty holding back investment. And I must say that in the estimates we have made we have also been cautious, in the sense that the contraction, at the end of the day, could even be higher'. Weighing on national demand, however, is also the expected effect of Transition 5.0, a measure that, despite having a dowry of over six billion euro in tax credits, was only implemented in August, with limited use for now and continuous requests for changes and simplifications from companies, changes that will at least in part be incorporated into the Budget Law. 'Positive changes,' explains Bettelli, 'but at this point the announcement of retroactive effects on the market does not affect the market much, and I can see this among my clients. The promises have been many and now companies are asking for certainties: drafts are not enough, we need definitive texts and publication in the Official Gazette'.

The other, unresolved issue, however, concerns the time aspect, taking into account a sector, the plant-engineering sector, that has lead times of up to 7-8 months for individual projects, against a measure that is currently scheduled to end in just over a year. "I believe that at this point the time to use all the available resources is no longer there, seeing also that even the idea of the mini-extension until April seems to have been scrapped at the moment. This is why, and not as of today, our companies are asking to be able to count on stable and defined measures, which will allow them to give continuity to modernisation and plan investments in good time. So, instead, we have moments of boom and rush for orders, which we then don't even manage to fulfil completely, followed by periods of crisis and difficulty'.

However, these difficulties seem to Bettelli to be more structural than contingent for national and European industry, requiring a change in overall approach, both on the part of companies and institutions.