Economic outlook and market attractiveness Innocenzo Cipolletta AIFI Chairman Zurich, 14 April 2015
Some features of the Italian economy In spite of the difficult economic scenario, Italy: Is the 6 th strongest world manufacturer, 2 nd among European countries Is an export-led economy: the trade performance index ranks Italy as 2 nd best after Germany for number of best placings in its sector tables Has more than 140 districts fostering innovation and counterbalancing SMEs weaknesses Has well known-brands and excellent firms in 4F sectors Has a great propensity to innovate, in spite of a low level of R&D investments 2
Good ranking in terms of GDP, export and industrial production Ranking among EU countries By GDP By export By ind. production 4 th 4 th 2 nd 2,149 USD bn 615 USD bn 447 USD bn 105 GDP Domestic Demand Exports 100 95 90 85 80 75 Note: absolute values, chain linked reference year 2010, seasonally adjusted data Source: World Bank (December 2014), European Commission Economic and Financial Affairs, Istat 3
Overall debt in line with other developed countries 400 350 300 250 200 150 100 50 0 Debt-to-GDP ratio by country and sector (%) Government Corporate Household Note: top 25 countries (advanced and developing economies) ranked by decreasing real economy debt-to-gdp ratio, 2Q 2014. Source: McKinsey Global Institute analysis 4
6 th strongest world manufacturer Share of global manufacturing gross value added Rank 1980 1990 2000 2012 1 UNITED STATES UNITED STATES UNITED STATES CHINA 2 GERMANY JAPAN JAPAN UNITED STATES 3 JAPAN GERMANY GERMANY JAPAN 4 UNITED KINGDOM CHINA GERMANY 5 FRANCE UNITED KINGDOM UNITED KINGDOM SOUTH KOREA 6 FRANCE 7 CHINA CHINA FRANCE RUSSIA 8 BRAZIL BRAZIL SOUTH KOREA BRAZIL 9 SPAIN SPAIN CANADA UNITED KINGDOM 10 CANADA CANADA MEXICO FRANCE 1980-2012 Source: Manufacturing the future, McKinsey Global Institute on HIS Global Insight data (november 2012) for 1980, 1990 and 2000 data; Updated with World Bank data ITA/ICE Analysis 2013 for 2012 data 5
Not only «Made in Italy» sectors Share of sales at constant prices High tech 4% 7% 6% 6% Machinery & electrical equipment 26% 25% 28% 31% Transport Intermediate goods Household goods Fashion goods 7% 7% 23% 24% 4% 5% 18% 15% 8% 7% 24% 23% 5% 4% 12% 11% Other consumption goods 19% 19% 18% 19% 1984 1994 2004 2014 Source: Intesa Sanpaolo Prometeia 6
Great performance in the international competitiveness Ranking of main manufacturers in the trade performance index (2013) Ranks 1 to 3 Macro-sectors Germany Italy China Ranks 4 to 10 South Korea France Japan Fresh Food 27 37 50 79 6 89 8 Processed food 1 7 24 71 3 88 38 Wood products 1 25 36 50 28 53 31 Textiles 2 1 3 8 19 35 35 Chemicals 1 28 24 9 4 8 6 Leather products 15 1 2 38 16 74 40 Basic manufactures 1 1 2 6 4 27 7 47 Non-electronic machinery 1 2 5 11 10 12 25 IT & consumer electronics 12 22 8 7 18 40 23 Electronic components 2 1 2 40 17 20 5 30 Transport equipment 1 2 18 3 14 12 35 Clothing 15 1 2 47 12 79 41 Miscellaneous manufacturing 3 1 2 8 41 23 9 25 Minerals 31 46 75 66 28 85 21 United States Note: 1 includes metal and marble products, and pottery; 2 includes electrical household appliances; 3 includes glasses, jewelry, and plastic art. Source: Elaboration by Ministry of Economic Development and Fondazione Edison on International Trade Centre data 7
5 th manufacturing trade surplus (G-20 countries) 1.000 2010 2013 Exports 337.3 389.8 52.5 Imports 367.4 359.4-8.0 Trade balance -30.1 30.4 DEFICIT SURPLUS 1,000 800 600 Trade balance value for manufactured products (USD bn, 2013) Italian trade balance (Euro bn) 60.5 400 200 131 Highest absolute change among EU countries trade balances (2010-2013) 87% from improvements in exports 0-200 -400-600 Source: WTO and elaboration by Fondazione Edison on Istat data 8
Good perception of Italy as country of origin Ranking of countries in The Made In Report (2014) 1 6 USA 2 France 3 Germany 4 Japan 5 Italy UK 7 Switzerland 8 Sweden 9 China 10 S. Korea Rank Food and beverage Personal care and beauty Automotive Electronic goods Fashion Luxury 1 France USA Germany Japan USA Switzerland 2 Italy France Japan USA Italy France 3 Spain Switzerland USA Germany France Italy 4 USA UK Italy S. Korea UK UK 5 Japan Germany UK China Japan USA 6 Germany Japan France Sweden Sweden Japan 7 UK Italy Sweden Finland Spain Germany 8 Switzerland Australia S. Korea Canada Germany Belgium 9 Turkey Sweden China Taiwan Turkey Sweden 10 Belgium Thailand India Italy China Spain Source: The Made In Report by FutureBrand 9
High propensity to innovate % of innovative companies on the total of the sector Manufacturing Medium and high tech manufacturing Core innovation sectors 87 63 55 46 68 68 41 43 37 29 61 23 39 57 34 Germany Italy France Spain United Kingdom Note: % of companies with product or process innovation realised during the year (2012). Source: elaboration by CSC on Eurostat data 10
Industrial districts fostering innovation 143 districts In recent years: 65.5% of the companies has strengthened the internationalisation process 49.4% of the companies has increased the quality of the products Fashion Mechanics Automation Furnishing Home Food and beverage Other 12.2% of the companies has started new productions in new sectors/productive diversification 8.4% of the companies has become market leader Source: Intesa Sanpaolo, Osservatorio Nazionale Distretti Italiani 11
6 out of 10 top manufacturing districts in Europe Total value added in the industry (Euro bn, 2011) Top 10 manufacturing districts in Europe* 10,107 9,730 8,636 8,617 7,681 7,480 7,155 6,968 6,963 6,885 Brescia Bergamo Wolfsburg, Kreisfreie Stadt Vicenza Böblingen Monza e della Brianza Treviso Modena Ingolstadt, Kreisfreie Stadt Ludwigshafen am Rhein, Kreisfreie Stadt *Parameters to select districts: % value added of the industry > 30%; % of employees who work in the industry > 30%; N. of employees who work in the industry > 20,000; Value added per employee > 50,000 Euro; Total value added in the industry > 3 Euro bn Source: elaboration by Fondazione Edison and Confindustria Bergamo on Eurostat data 12
High dependency on banks % of bank loans on the financial debts of non-financial companies 2007 2012 2013 80 70 60 50 40 30 20 10 0 Italy France Germany Spain EU Area UK USA Note: share of domestic banks loans on total financial debts. Source: Banca d Italia, Istat, BCE, Bank of England, Federal Reserve System Board of Governors and Bureau of Economic Analysis 13
Some trends in the global macroeconomic scenario Falling oil prices Strong GDP growth in the US Growing competitiveness Euro area exporters (due to Euro depreciation) Nominal interest rates close to zero Improving financial conditions EU Investment Plan that should positively affect the growth outlook 14
Economic outlook and market attractiveness Innocenzo Cipolletta AIFI Chairman AIFI Zurich, 14 April 2015 15