Report on the state of packaging - December 2021

28/01/2022

Jan 28, 2022

Four-monthly observatory of the packaging supply chain: situation updated to December 2021.

Barbara Iascone
Istituto Italiano Imballaggio

This report provides a cross-section of the trends in the manufacturing industry sectors where packaging consumption is most intense - and their consequent evolution - divided into food and non-food macro-areas.

The evolutionary frameworks of the manufacturing sectors have been taken from sector analyses elaborated by trade associations, the data bank of the Italian Packaging Institute or Prometeia.

Sector trends

This analysis is based on elaborations referring to the data of the first eight months of 2021 projected to the end of the year, during which the manufacturing sector has managed, in general, to recover the losses caused by the pandemic that hit us from 2020; as far as turnover at constant prices is concerned, 2021 should close with a +0.8%.

Both the domestic market - especially thanks to the incentives provided by the Government - and the foreign market have contributed to this trend, albeit to a small extent, with the recovery of Made in Italy in foreign markets.

It is assumed that the growth of manufacturing in the next two years will be around +4.2% on average per year.

The growth of manufacturing involves almost all sectors, with different tendential trends: as many as 15 sectors end the year with a complete recovery compared to the pre-covid period, starting from sectors related to the home system.

Compared to 2019, construction products and materials in fact record a growth rate that is around +12.7%: the different types of incentives promoted in recent years have given a big boost to the sector that, at the end of 2021, has even struggled to find the material to finish the work started.

The “household appliance” sector showed renewed vitality, with a 7.6% increase, as did the furniture sector (+6.5%).

Chemical intermediates also reached and exceeded pre-crisis levels, posting a 2.9% increase.

The “food and beverages” and “pharmaceutical” sectors also did very well, growing by 2.3% and 0.9% respectively.

Although they both performed decidedly less well in 2021 than they did in 2020, they still closed with revenues above pre-crisis levels. It should be noted, however, that these two sectors, along with a portion of FMCG, are the ones that have best withstood the negative impact of 2020.

As far as the FMCG sector is concerned, the delta with respect to the pre-crisis period is around -2%, with the exception of household cleaning products and personal care products, which instead maintained a positive trend, with consequent beneficial effects on the packaging component.

The cosmetics sector, hit hard in 2020, experiences a significant recovery in the first half of 2021, with a recorded growth of 8%.

To close, we find the Fashion System, which also in 2021 maintains a high gap with the period before the pandemic, recording at the end of the year a -8.9%.

General economic picture

The end of 2021 confirms a slowdown of the Italian economy: the economic trend of the year shows in fact a flattening from the summer period onwards.

The opinion of Confindustria

It is precisely in the fourth quarter, according to the Centro Studi di Confindustria, that the braking is confirmed, and this for various reasons including the rise in energy costs, the scarcity of commodities and, last but not least, the increase in contagions.

However, the manufacturing industry is also registering comforting trends in view of the beginning of 2022, thanks to the increase in orders: also in this case, however, it is necessary to take into consideration the increase in energy costs, which could at least determine an erosion of profit margins. In the general economic scenario, services also recorded a recovery, albeit partial. With regard to tourism, domestic tourism is doing well, but the number of foreigners vacationing in our country is declining compared to 2019, due to contagions and various restrictions. Household consumption was supported by the propensity to save, recorded in 2020 following the forced closure of many workplaces. The greater economic availability has in fact led to an increase in spending and consumption in 2021. The trend of exports of Italian goods is also good, growing by 2.5% in the third quarter, but slowing down in the fourth, when, in volume, it falls by 0.8% due to the increase in the prices of intermediate goods and the cost of energy. Again, according to the Centro Studi di Confindustria, employment recorded positive trends in 2021; the number of people employed, at a low in January, largely recovered during the year much of the decline. Finally, inflation: in Italy it rose by 3.8%, less than in the rest of the world (+5% in the USA, +4.9% in the Eurozone).

The opinion of Prometeia

According to Prometeia’s analysis, Italian IPL in 2021 should settle around +6.3%, confirming growth in the following years, to arrive in 2024 with +2%.

In the third quarter of 2021, household spending grew by 3% compared to the previous quarter, giving a significant boost for the following months. Prometeia records excellent performances for Italian manufacturing: the Bel Paese is in fact the only one, among the four most important countries in the Eurozone, to have recovered pre-crisis levels. The industrial production index is expected to register +11% in 2021, then settle at +2.4% in 2022.

The packaging sector

The final figures for the year 2020 show us a sector in good health, which has coped well with the difficult times and has been able to largely contain its losses.

In 2020, the production of packaging (including MSW bags) expressed by weight stood at around 16,642 t/000, marking a decline of around 1.6% compared to 2019.

Turnover stood at around €33 billion, registering a decline of around 2.1%.

The assumptions for 2021 are that the industry will recover with a positive trend. All in all, we can consider the packaging industry as a healthy area, which has been able to withstand and deal with a social and economic crisis of great magnitude.

Production expressed in tons shows an increase of 1.5%, supported both by exports - which should settle with a tendential rate of +5% - and by the domestic market, up by 1.6%. Important leap forward for imports, which continue to grow steadily: in 2021 they should increase by around 20%.

With an average annual growth rate of +0.4% in 2023, we should exceed 17,300 t/000 of packaging produced in Italy.

As regards the quotations of the raw materials used to produce packaging, in 2021 they are all on the rise, with surges in the last two months of the year. This phenomenon has affected all materials, except for cellulose where increases have been decidedly more contained.

The differences between the average trend rates of 2021 and those of 2020 are very marked. For some plastic polymers we are even talking about more than 90% (this is the case of styrene butadiene acrylonitrile - ABS for moulding).

Balance of the empty packaging sector in Italy.

	2019	2020	Var. 20/19	Outlook 2021	Var. 21/20
Turnover mln €	33,976	33,256	-2.10%	33,589	1.00%
Production (t/000)	16,906	16,642	-1.60%	16,623	1.50%
Export (t/000)	2,922	2,842	-2.70%	2,984	5.00%
Import (t/000)	2,139	2,088	-2.40%	2,506	20.00%
Apparent use (t/000)	16,123	15,888	-1.50%	16,145	1.60%