The Industry

The production of woodworking technologies is Italy’s flagship. Its offering ranges from primary operation equipment for raw materials to surface finishing systems and secondary processing of solid wood and wood-based panels.

After the lockdown due to the coronavirus outbreak, the world is expecting a new global economic downturn. With such a scenario, speaking about 2019 is like analysing another era. Normality, as it was conceived before the health crisis, will probably be achieved in 2021.
However, by analysing the 2019 events, we can understand what we have lost in this lockdown period. As a matter of fact, woodworking machinery sector was already creaking. Of course, the negative trend before the health crisis has nothing to do with what has happened in the last two months. However, it turns out that this sector was already suffering. A major effort will be needed to reach the levels achieved in the 2016-2018 period.

Starting from production, the Italian woodworking machinery and tool industry were worth € 2,266 million in 2019, recording a 9.9% decrease compared to 2018. This moderate downturn is partly because the first part of the year can still be considered as acceptable. Moreover, the problems of this sector originated from German competitors who have recorded a far more substantial loss. By analysing the ten-year chart, it is clear that production levels remained reasonably good compared to 2008, without considering the inflation effect.
2020 is expected to be even worse, without considering the impact that the virus will have on the markets from now till the end of the year.

If we consider both exports and the domestic market, we will find converging yet different trends. Exports closed the year with an 8% decrease, proving that its mature markets are still holding up. Unlike Germany, Italy has strong export flows. This means that if a specific market collapses, other markets will not be affected, holding up their consumption levels.
The downturn of the domestic market was equal to 13.5%, which came after five years of positive variations. Tax incentives have strongly influenced this value, allowing many companies to update their systems from 2016 to 2018, thus deflating the potential demand for the years to come.
The imports situation is even worse, having recorded a 17% decrease. In this case, converging consumption data (domestic market and imports) confirm the lack of demand, which was already ongoing in Italy.

The commercial balance, i.e., the balance between export and import, is keeping a high value (almost € 1,400 million). Stating these variables in the sector analysis is essential because export has always been a major part of Italy’s production. And instrument mechanics is a sector that actively contributes to Italy’s positive trade balance. These variables can make the difference in a period in which everybody talks about Italian-made products, production reconversion and the possibility to bring some outsourced productions back to Italy. As a consequence, import conditions are not always advantageous.

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