Report on the state of the packaging – Data 2018 (1)

Feb 20, 2019

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Quarterly observatory of the packaging supply chain: situation in December 2018. Consolidated data and development assumptions in the two-year period 2019-20.

Here we see a breakdown of the performance of the manufacturing industry, where packaging consumption is more intense, divided into food and non-food macro-areas.
The evolutionary frameworks of the manufacturing sectors were taken from sectorial analyses developed by the trade associations, the Italian Institute for Packaging database or Prometeia.

FOOD
Food and beverage
According to Prometeia’s analysis, the Italian food industry as a whole should have closed 2018 with a modest growth in production (0.8%). Exports remain the driving force of the sector, while domestic consumption is rather stable.
What is changing in the food sector is distribution: albeit at lower levels than the rest of the world, including Europe, online sales are indeed starting to become an interesting phenomenon and noteworthy in our country.
Although in Italy online purchases of food remain among the lowest in the world, and at the level of distribution of purchases those relating to food represent about 0.7% of the total national e-commerce, the growth rate of area should be emphasized: in 2018 online sales of food & grocery increased by 34%. This phenomenon, like all online commerce, positively influences the packaging sector.
As regards the two-year period 2019-20, production grew by 0.8%.

NON FOOD
Pharmaceutical products
Again according to Prometeia’s elaborations, at the moment the data for Federfarma are those previously given. Growth in 2018, with a growth rate of turnover at constant prices that should settle at around + 3%. For the two-year period 2019-20, the growth rate should slightly exceed 2%.

Fashion system
Prometeia confirms the positive trend of the Fashion System started in 2017: +1.5% in 2018, with a growth rate forecast for the next two years at around 0.8%.

Cosmetics and perfumery
The sector confirms a growth in global turnover for 2018 of +4.5%. The constantly rising exports are certainly contributing to the trend, but so too, domestic market, which with +2% provides a good contribution to the sector.

Furniture and furnishings
In 2018 the sector registered a growth in turnover at constant prices of +1.1%, which will also be confirmed in the following two years.

Chemical products
Source: Federchimica
After a decidedly brilliant 2017, 2018 closes with growth rates reduced compared to the previous year: +1.4% for the sector as a whole, with a trend in line with the European average (+1%).
The chemical sector confirms its nature as a “sensitive thermometer” of the general economic trend, as it contemplates various categories of intermediate products used in the most disparate industrial sectors.
There are many elements to consider for the slowdown in the growth of this sector, first of all the oil price increases recorded in 2018. The forecasts for 2019 confirm the hypothesis of a +1.4% for the national chemical sector.

Mechanics
(agricultural, tools, special purpose, energy machines)
According to Prometeia, the trend of this sector in 2018 is among the best of the Italian manufacturing industry and which should close the year with a + 3% approx. The next two years should confirm the good growth rates leading to a further + 2.8% annual average.
Domestic appliances
Among the less performing sectors for 2018 we find that of household appliances, which put in a slight + 0.6%; the situation should also be similar in the two year period 2019-20.

Building materials
According to Prometeia’s analysis, building materials should close 2018 with a + 1.6%, which will also be confirmed in the following two years.

General economic picture
In 2018 the world economy slowed down: according to the International Monetary Fund forecasts, growth stopped at the 3.7% already recorded in 2017.

In this context, the IMF forecasts for Italy are GDP growth of 1.2% for 2018 and 1% for 2019.
Also according to the IMF, after a 2017 with GDP growth of 2.4%, in 2018 the Eurozone should record a growth of 2%, which will drop further in 2019, when the GDP is expected to be +1.9% .

According to Confindustria
According to the analysis of the Confindustria Study Center, the Italian recovery is in line with the global one, hence down compared to 2017.
GDP is growing at a lower pace than IMF forecasts: +1.1% in 2018 and +0.9% in 2019.
Again in relation to GDP, in the third quarter of 2018 there was a -0.1%, confirming a very weak trend also in the fourth quarter.
In October, industrial production grew by just 0.1% and in November the confidence of companies in manufacturing activity worsened. Even orders do not give a glimpse of particularly positive signals.
As for exports, not particularly brilliant performances were recorded, and domestic demand slowed down compared to 2017.
The resumption of employment was practically halted in June, registering a -0.2% in the third quarter of 2018.

According to Prometeia
On the basis of the latest Prometeia report available (November 2018), the Italian manufacturing sector closed the year with a growth rate reduced compared to the +2.8% recorded in 2017 and turnover - value at constant prices - increased by 1.7%. The sector that in 2018 recorded the most disappointing performances is that of motor vehicles and motorcycles.
The slowdown is certainly attributable to the uncertainty that characterizes Italy both internationally and internally, and which will also influence growth in the following two years: the average annual growth rate for 2019-20 will be +1.6%.
However, the main elements supporting the growth of the manufacturing sector are investments in raw materials, machinery and means of transport, even if results slowed down in the second half of 2018.
The recovery of the building industry should be confirmed in the medium term, surpassing the record low levels registered in previous years.
According to Prometeia’s analysis, consumption should have grown by 0.8% in 2018 and should reach +1% in the following two years. In this regard, it should be considered that the propensity to save of households has become very consolidated over the years, remaining higher than pre-crisis values.
Italian exports continue to be very competitive, so much so as to mark, in 2018, growth rates higher than those of world growth rates and those of the main European competitors: +3.4% in Italy, -0.4% worldwide. Prometeia expects these rates to be reconfirmed in the two-year period 2019-20, registering an average +3%.