Lombard manufacturing holds up in Q3 2024

(Il Sole 24 Ore Radiocor) - In a difficult international context, characterised by the German crisis and stagnating world trade, Lombard manufacturing companies showed general resilience in the third quarter of 2024. Compared to the previous three months, industry turnover grew by 0.4 per cent, while handicrafts showed a decline of 0.2 per cent. Production declined slightly for both sectors (industry -0.4 per cent and handicraft -0.2 per cent), while foreign demand grew slightly over the previous quarter (+0.6 per cent). This is what emerges from the data processed by Unioncamere Lombardy, according to which the economic situation of Lombardy's manufacturing sector is also affected by the weakness of domestic demand, with a slight slowdown in orders for industry and an overall hold for the craft sector. Employment is slowing down for both sectors, with an increase in exit rates and a decrease in entry rates. As regards the comparison with 2023, handicraft production remains in line with the level of a year ago, with almost no change, while industrial production shows a negative sign.

At the sectoral level, those growing include the manufacturing industries (+6%). Added to these are the chemical sector (+5%), which suffered last year due to the rise in the price of energy goods, and the food sector (+2.4%), while textiles (-9%) and leather-footwear (-7.1%) contracted. On the other hand, the steel (-4.8%), non-metallic minerals (-4.7%), transport equipment (-4.3%), wood-furniture (-3.5%), and clothing (-2.9%) sectors recorded declines. Less intense was the contraction in mechanics (-1.1%) and paper-press (-0.9%); stationary was the rubber-plastics sector (-0.1%). With regard to companies' use of redundancy funds, the sectors in greatest difficulty are still textiles, clothing, leather-footwear and transport equipment. As far as expectations are concerned, most entrepreneurs still expect stability.

"Lombardy's production and economic system is holding up despite a complicated international context. We are growing by 0.4%, we confirm that we are the leading manufacturing region in Europe, and we continue to play a leading role in the national and continental framework. Certainly there are difficulties due to external and supra-territorial reasons, including the instability of the international geopolitical context, the cost of liquidity and energy,' commented the Lombardy Region's Councillor for Economic Development, Guido Guidesi, emphasising that these are 'slowdowns due to global issues and European hyper-regulation that are putting the entire European manufacturing sector at risk'. In any case, Guidesi added, 'despite the adversity, the Lombardy system remains competitive. Of course, this period worries us, but we are Lombardy and we will continue to confirm ourselves as the engine of the country and of Europe. It is inescapable that changes are needed at the European level so that we can return to giving priority to manufacturing and industry, which are indispensable for European competitiveness'.

"The data presented today show concern on the part of companies due to the geopolitical factors that have been gripping us for some time. Most companies show an average level of concern about rising energy costs and possible new supply difficulties. There is certainly a clear improvement compared to past years, both as regards the share of companies that have activated strategies to cope with new energy shocks, and those that have invested in energy self-production plants,' stressed Gian Domenico Auricchio, President of Unioncamere Lombardy, adding that 'this does not detract from the fact that attention must be high: it is necessary to go down this road to avoid too high a price. If these are the major elements of risk, together with the German car crisis, on the other hand the opportunities to be seized could certainly be those of a reduction in interest rates, and a drop in the cost of raw materials in view of an international recovery'.

"Although performing better than Italy and Europe, the stagnation of Lombardy's industry reflects the difficulties arising from an uncertain economic context and confirms well-known criticalities: hyper-regulation, lack of industrial policy and investment, imbalances in energy costs and shortage of raw materials necessary for the twin-transition are presenting the bill and, as the German crisis demonstrates, European industry seems to have taken the road to decline, also accomplice to the serious crisis in the automotive sector," added Francesco Buzzella, president of Confindustria Lombardia, for whom "an immediate change of course is needed in EU policies for companies. The EU not only risks irrelevance but will soon find itself alone in the green cause. Unique in the world in imposing this straitjacket, in the new global competitive environment that is emerging our companies will always be the most penalised compared to their competitors. The main risk factor for our companies is therefore not the possible US duties, but the ideological policies of Brussels. As Lombardy, what we can do is pursue our development model by continuing to work as a system, aiming to create a front with the other European manufacturing regions to stop this industrial decline'.