Quarterly observatory of the packaging supply chain: situation updated in July 2023. General economic situation; analysis of manufacturing activity in 2023; final 2022 data for the packaging industry.
Istituto Italiano Imballaggio
This report summarises the trend of manufacturing industry sectors in which the consumption of packaging is most intense, subdivided into macro food and non-food areas. The evolutionary situations of the manufacturing sectors are drawn from sectoral analyses carried out by category associations, ISTAT, and the Italian Packaging Institutes data bank, Prometeia. As ascertained for some time, the packaging sector is closely tied to the trend of manufacturing activity, especially the trend of those sectors with high packaging use, such as food and beverages, basic commodities, pharmaceuticals cosmetics, etc.
Food & Beverage
On the basis of an analysis of ISTAT data relating to the first 7 months of the year, we find a decidedly stagnant manufacturing industry, with the sectors with greatest use of packaging that should close with stable figures. This is true for the food sector which, after a first quarter in which there were negative trends close to -2%, should experience a trend reversal, closing at -0.6%. The same is true for the beverages sector, with a negative trend of around -3% in the first quarter; taking account of the summer season, however, but also of the possible developments during the Christmas period, it should arrive at closing 2023 with a +0.2%. Another area with a high impact on the packaging industry is the basic commodities sector which, in 2023, should record a +1%.
With regards to the non-food industry, again with reference to manufacturing sectors with greater use of packaging, cosmetics and pharmaceuticals are among the most significant, both growing in 2023. The cosmetics industry will close 2023 up around 10%, confirming the positive trend already recorded in 2022 and proving that the negative trends linked to the pandemic are by now behind us.
The pharmaceutical sector should close 2023 with increased production, with a growth rate of around +6%. Again, with reference to the non-food industry, there is a negative trend both for construction materials and for Fashion.
A characteristic that the entire manufacturing world has in common is the significant decline in foreign trade, which affects practically all sectors and particularly those with a significant use of packaging; this drop relates both to imports, and even more so to exports, leading to a considerable impact also on the packaging industry for which, with respect to 2023, we only at the moment have an estimate relating to the overall figure.
The packaging sector
The packaging sector closed 2022 with production (expressed in tonnes) down 1.3% (according to the latest final figures available). This was due, on the one hand, to the slowdown in consumption and, on the other hand, the increase in production costs. Conversely, there was a significant increase in turnover, achieving +10.9%. Another factor should be considered with regards to production expressed in tonnes: the fall could also relate, in fact, to a production adjustment following the important growth recorded in 2021. Once inventories have been restored, it is quite normal for production trends to slowly return to levels more in line with the regular trend.
The large divergence between the turnover trend and the production trend expressed in tonnes is justified by the considerable increase in the prices of raw materials that occurred in 2022, but also by the very strong increases with reference to energy costs and of production costs in general. This inevitably led packaging producers to apply significant increases in the prices of finished products which, obviously, did not generate increases in profits (the price increases only covered costs).
Packaging tonnes produced in 2022 fell slightly to under 18,000 t/000, accompanied by a drop in exports of around -2.5% and a growth in exports of +7.2%. This last figure confirms the trend of the last few years, which sees imports as protagonists of an important growth path; the trade balance between imports and exports remains positive, despite the fact that in 2022 it dropped by as much as 52%!
Starting from these final data, on the basis of the very first analyses referring to the first six months of 2023, the outlook for the Italian packaging sector describes a very small recovery with regards to production, which should reverse the trend, recording a growth of 0.5%. Turnover should continue to grow, even though at a much more limited rate of +3%. The real surprise for 2023 should relate to imports which could exceed exports for the first time ever; imported packaging, in fact, should grow by around +2% in 2023, while exports should fall by around 5%.
|Number of empolyees (estimate)||-||-||-||109,491||-||-||-|
|Number of companies (estimate)||-||-||-||7,257||-||-||-|
|Apparent use (t/000)||16,247||17,543||8.00%||17,551||0.05%||17,840||1.65%|
General economic picture
After a 2022 in which there was a return to a growth in GDP of +3.7% and a rise of +6.8% in market prices, 2023 opens very differently, with a contraction which in the second quarter arrived at 0.4%, driven by the negative trend in internal demand. On the basis of these figures, the European Commission has adjusted its GDP growth forecast for this year: it is now expected to be just 0.9% on an annual basis.
The view of Confindustria. According to the analyses of Confindustria’s research centre, the downturn emerging in the second quarter relates mainly to a fall in industry and constructions; the growth in services, however, continues, driven by the tourism’s positive trend. Expectations for the 3rd quarter are, albeit slightly, more positive with respect to the previous quarter. Industry remains weak, however, and while in the month of May there was a positive rebound of +1.6%, it should be remembered that the fall recorded at the beginning of the year was -1.9%, -2,4% with relation to manufacturing. The constriction industry recorded a decline and no longer supports manufacturing as in the last two years (-0.7% in May). Internal consumption is uncertain, falling since the beginning of the year, but could pick up in certain sectors due to the very high temperatures recorded in summer (consumption of household appliances, but also of drinks).
The view of Prometeia. The outlook for manufacturing in 2023 according to Prometeia is that of stability; the year, should close, in fact, with a meagre +0.4% in turnover at constant prices, consolidating the trend of the last two years. The prospects for the period 2024-2027 are for a more dynamic growth, at an annual average of +1.3% in turnover at constant prices. In 2023 and in the medium-term, driver sectors include Electrical Engineering, Mechanics, Electronics and Motor Vehicles and Motorcycles. Other sectors that could provide positive inputs will be those more focused on foreign markets (Fashion, Pharmaceuticals and basic commodities).