Manufacturing, 19th year-on-year fall in revenues in October and confidence falls

Cars: -20.7%. It is difficult, under these conditions, for the overall average to be bright with such a fall in revenues in this sector. And in fact it is not, with manufacturing revenues declining by 5.3% year-on-year in October, the 19th consecutive drop. The half-full part of the glass is the 0.5% increase in turnover compared to the previous month, a growth that also concerns volumes. This, however, is the only positive indication, a meagre consolation in an averagely depressed picture, which sees in the ISTAT data yet another manifestation of weakness. With the last positive figure, on an annual basis, dating back to March 2023, only slightly better than production, which has already reached 21 consecutive months of 'red'. The balance sheet for the first ten months of the year, which is more solid than the monthly trend, nevertheless sees a drop in manufacturing revenue of 4.3%, which is reduced to a three-point decline if the price effect is removed and only volumes are taken into account.

Looking at the yearly figure, however, what is holding back the averages, apart from cars, is a wide-ranging reduction in revenue, which affects, among others, machinery (-6%), metal products (-8%), leather (-10%), textiles and chemicals (-6%).

If October's monthly recovery (after five months of decline) is an interesting sign, which moreover directly follows the increase in export-related receipts, up by 1.6% over the year as a result of the recovery in Germany and France, the trend in production is different, which even in October continues to record lacklustre data: zero growth in the monthly figure, -3.6% in the annual comparison. The lacklustre data, those of the manufacturing sector, are also affecting the qualitative surveys, as confirmed by the confidence indices recorded in December. The consumer index fell from 96.6 to 96.3 and if the business indicator is estimated to have risen (from 93.2 to 95.3), this is only due to services, while construction and manufacturing lost ground. Manufacturing in which production expectations remain negative, while judgements on orders, where the balance is still negative, are worsening slightly;

Brighter expectations in services reflect a more robust trend in revenues, with monthly growth of two points, or 2.8% per annum. Progress that involves the sector almost across the board in several areas: from tourism to transport, from catering to trade. Growth which, however, is not enough to significantly shift GDP estimates, which are rather being revised downwards at this stage.

As did Prometeia, which reduced the progress of national GDP to 0.5% for this year and provided a similar estimate for next year. Decisive is the stagnation of investments (Istat estimates a sluggish progress in 2024 and zero growth in 2025), which pay on the one hand for geopolitical uncertainty and the limited reduction in interest rates; on the other hand, they see a clear brake in the long wait for Transition 5.0, delayed and complex measures that have resulted in the freezing of the domestic machinery market, which will fall by more than five billion during 2024.