Report on the state of packaging – Data 2019 (2)

Jul 22, 2020

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Four-monthly observatory of the packaging chain: situation in early May 2020. The analysis obviously suffers from the consequences of the world pandemic, which has blocked activities and heavily influenced everyone’s habits, in many ways.

Barbara Iascone
Istituto Italiano Imballaggio

Here is a cross-section of the performance of the manufacturing industry sectors where the consumption of packaging is more intense - with their consequent evolution - divided into the food and non-food macro-areas.

The evolutionary pictures of the manufacturing sectors are taken from the sectoral analyses elaborated by trade associations, the database of the Italian Packaging Institute or by Prometeia.

The data highlighted are those available at the time of this analysis (May 2020).

The only sector of which Prometeia hypothesizes a positive trend for 2020 is the pharmaceutical one, which should record a growth in turnover at constant prices of + 4.2%: a fact that will not only be the result of the role that the sector is playing in the current emergency, but also due to the solidity of our national industry. It is also assumed that it will be the only sector with a positive trend also for exports.
As for the food industry (food and drink), it is assumed that it will maintain a moderately negative trend -4.4%, benefiting both from the double-digit growth relating to many product categories recorded during the lockdown and from the fact that it was not subjected to production shutdown. The sharp drop suffered by the Ho.Re.Ca. channel is decisive for the negative sign of the trend in this area.
The mass consumption area will record a drop of -10.1%, strongly affected by the drop of the cosmetic sector. Based on the analysis of the Cosmetica Italia study office, a reminder that, in 2019, cosmetics closed at the end with a growth rate of + 2.3% supported by + 2.9% of exports (+ 22% important registered in online sales).
The electronics sector will record a -13.4%, however finding some support in the push for investments in digitalization linked to the development of smart-working and distance learning in the lockdown period.
The situation of the entire manufacturing sector is very critical; the sectors with the worst performance will be chemical intermediates (-15%), metal products (-16%), the fashion system (-18.6%), furniture (-15.4%), household appliances (- 22.1%), all penalized both in terms of internal consumption and production because of the forced stop, but also - and above all - by the halt in exports.
But the automotive industry will pay the damage caused by the pandemic more than others, closing the year, according to forecasts, at -25.9%.
As for chemicals, the latest processing available from the Federchimica study center dates back to January 2020. According to the data, the 2020 prospects were already full of uncertainties, due to the ban on disposable plastics and the effects of the Plastic Tax. This picture has however been obscured by the emergency situation, the effects of which the sector will have to analyse shortly. In all probability, plastic in general will rise again, precisely in light of the measures to be adopted in the post lockdown phase, first of all the need to return to the use of disposable items in bars and restaurants.

NOTE: The data used for the preparation of the report is taken from the database of the Italian Packaging Institute.

General economic picture

According to the Spring Report produced by the International Monetary Fund, in 2020 the recession will be global due to the Covid-19 pandemic and the global GDP trend will be -3%.

The economically more advanced countries will record a GDP decline of 6.1%, with the USA at -5.9%, Europe (eurozone) at -7.5% (Germany -7%, France-7.2% , Italy -9.1%, Spain -8%)

As for the rest of the world, -6.2% is expected for the United Kingdom and -5.2% for Japan.

The drops in emerging countries are less important, where in general there will be a GDP of -1% and with very different trends: Asian countries will presumably grow at around 1% (China and India), while Russia is expected to experience a drop of -5.5%, as will countries in Latin America to -5.2%.

There remains great uncertainty about the recovery in 2021, although the IMF has forecast a worldwide recovery of 5.8%. In the Eurozone, it should translate into + 4.7% and, in particular for Italy, into + 4.8%.

According to Confindustria

The sudden and prolonged blockage of almost all activities has caused an unthinkable economic shock in Italy (as in the rest of the world), which has involved both supply and demand.

We have lived in uncertainty for many weeks, without knowing which activities would resume, with what timing and in what ways.

Confindustria forecasts see manufacturing activities operating 100% at the end of the first half of the year, with a slowdown in the recovery of the demand for both goods and services.

Based on these assumptions, the Confindutria Study Center expects a drop in GDP in the second quarter of -10% compared to the end of 2019.

According to Prometeia

The Italian manufacturing sector, as well as the whole economy, suffered a double blow: not only is domestic demand falling sharply, but also the supply of goods. According to Prometeia’s forecasts, all this translates into a 14.7% drop in turnover at constant prices for the entire sector.

All components of the market will drop significantly: exports will decrease by 13.5% and imports by 11.8%. Domestic demand should drop by -14%.

A recovery, at least partial, should be recorded for 2021: turnover at constant prices should recover + 5.3%, exports 6.6% and imports 7.2%. {Domestic demand is expected to grow by 5.4%.