Confindustria Brescia, industrial production rises (+2.2%) in Q1 2024

The economic survey of the Research Center has been published Confindustria Brescia on the data relating to the period January-March 2024. In the 1st quarter of 2024, production activity in the Brescia manufacturing sector showed a change compared to the previous quarter of +2.2% (cyclical)while the evolution compared to the same period last year (trend) still shows a negative sign (-2.3%)of a similar entity to that experienced between October and December 2023. Following the developments indicated above, the acquired rate – i.e. the average annual variation that would occur if the production index did not undergo changes until the end of 2024 – is not very positive (+0.5%), despite the negative component inherited from 2023 (-1.6%).

«The growth recorded for the Brescia industry in the first three months of the year is part of an overall positive national context – he comments Franco Gussalli Beretta, president of Confindustria Brescia -, characterized, among other things, by the good evolution of the GDP, by the low prices of energy inputs, but still high when compared with pre-Covid, and by the gradual recovery of Italian manufacturing. In this situation, however, we record a new increase in costs purchase of raw materials (+2.8%), in line with the upward movement recorded on international markets in the prices of the main commodities used by Brescia companies. An aspect that we continue to monitor, in light of the previous impacts already experienced on our production system.”

In detail:

• In the first three months of 2024, the 35% of the operators interviewed declared an increase in activity compared to the previous periodcompared to 45% who expressed their opinion in favor of maintaining the volumes produced and 20% who instead reported a decrease in the same.
• The disaggregation of the variation in production by size class shows generalized “plus signs”: +1.0% for micro businesses+1.8% for small ones, +3.7% for medium ones and +1.7% for large ones.
• With reference to the economic dynamics by sector, production activity highlighted a certain heterogeneity. Positive results are coming from the realities of metallurgy (+5.8%), wood and non-metallic minerals (+4.9%), the fashion system (+4.7%) and mechanics (+1.9%). The food (-0.9%) and chemical, rubber and plastic (-0.5%) sectors are instead characterized by a decline in output.
• The rate of utilization of production capacity is attested to 77%slightly increasing compared to the previous survey (76%), but decreasing by 3% compared to what was measured in the first quarter of 2023 (80%).
• Sales on the Italian market increased for 33% of companies, which remained unchanged for 47% and decreased for 20%. Sales to EU countries grew for 24% of operators, decreased for 21% and remained stable for 55%; those towards non-EU countries increased for 23%, decreased for 20% and remained unchanged for 57% of the sample.
• The costs of purchasing raw materials they are reported to be growing by 28% of companies, with an average increase of 2.8%; this evolution (the most marked in the last year) would be consistent with the upward movement recorded on international markets in the prices of the main commodities used by Brescia companies (in particular agricultural and metallurgical ones).
• Also between January and March, the selling prices of finished products they were revised upwards by 21% of operators, for an overall change of +1.6%. The aforementioned developments would therefore indicate a recovery, although not currently comparable to what was found between 2021 and 2022, of inflationary pressures within industrial commodities.
• The (relative) good cyclical phase that characterizes local manufacturing is confirmed by the fact that as many as 50% of the companies interviewed indicates that no production limiting factor is expected. In this regard, the realities that signal a brake dictated by insufficient demand they stand at 33%, a still high share, higher than what was found in the first quarter of 2023 (27%), but decreasing compared to the previous survey (40%). Among the remaining potential obstacle factors, geopolitics stands out (and is in fact new) (6%), in line with an increasingly complex international framework.
• Finally, it should be remembered that the financial tensions (also triggered by the credit crunch of recent months) are reported by only 1% of the operators interviewed; this is a positive element, which would be justified by the enormous efforts made by the local production system in terms of company capitalization.
• The forecasts for the coming months are moderately positive, with a positive net balance (+17%) between optimistic and pessimistic indications, despite the absolute majority of the sample (57%) being oriented towards substantially maintaining the production levels recorded in the first quarter of the year. As already indicated months ago, among the elements of potential positivity we must mention: the recovery of the German locomotive (whose growth is however expected to stabilize at rates that are anything but exciting), the low prices of energy inputs, the stabilization of inflation. Among the risk factors, the following should be mentioned: the weak phase of global manufacturing, the exacerbation of ongoing geopolitical tensions, the possible negative effects on world trade resulting from possible new bottlenecks in international transport.
• In this context, the sectors with more positive prospects would be chemicals, rubber and plastics, mechanics and metallurgy. The realities of the food industry, wood and non-metallic minerals and the fashion system instead express greater caution for the months to come.
• Orders from the domestic market are growing for 22% of companies, stable from 62% and decreasing from 16%. Those by community operators are declared to be increasing by 17% of companies, unchanged by 66% and decreasing by 17%. Those arriving from non-EU markets are growing at 20%, stable at 65% and contracting at 15%.