Report on the state of packaging – Data 2017 (3)
The quarterly observatory of the packaging supply chain: situation in July 2018. Consolidated data for 2017 and initial closing forecasts for the year. Barbara Iascone Istituto Italiano Imballaggio
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.
FOOD
Food and beverage
Source: Federalimentare, IRI, Istat
The Italian food sector continues to prove to be one of the country’s mainstays: in 2018 it aims to reach 140 billion euros, with a growth rate that according to Federalimentare’s forecasts will be at around 3.5%.
Exports still lead the way in the sector, while domestic consumption is still holding back, registering a drop of 0.4% in terms of volume. According to an analysis by IRI Italian domestic consumption is seen to be stalling after the excellent performances registered in 2017: if the one hand, the climatic conditions have influenced the trend of the domestic market, price policies have also played their part.
And if in 2017 the climate led to the greater consumption of some food products, especially beverages, due to a prolonged and very hot summer, already in the first part of 2018 a strengthening of prices was witnessed, which has in fact led to some drop in consumption. Also this year, sales by volume in the food sector - including pet food - should register a +0.2 %%, compared to a +1.5% in 2017. As for the beverage sector, sales by volume are expected to decline by 1.8% compared to +3.8% in 2017.
In terms of production, according to ISTAT data for the first 5 months of the year, a +1.8% for the food sector and a +3.3% for beverages was registered, confirming that exports will continue to lead the sector.
Analysing the various segments, meat processing and dairy products are seen to be up by 3.3%, processed grain and starch products by 3.1%, homogenized products by 2%, with chocolate-based products, sweets and confectionery showing a 4.9% rise. Spices and seasonings (excluding oil) have increased by 6.9%. Of note the + 18.4% of ready meals.
As for beverages, in the first 5 months of the year there has been growth of 13.9% for beers and 2.2% for non-alcoholic beverages, while non-alcoholic drinks registered a modest +0.6%. In this context, the only production showing a downturn is that of wine (-0.5%), but this only refers to the first 5 months of the year.
Production of fruit and vegetables is down 4.3%, fish products are down 3.5%, vegetable and animal oils and fats were seen to be down 3.2%.
NON FOOD
Cosmetics
Source: Cosmetica Italia Research Center
According to the analysis, the sector will close 2018 with a global turnover growing by 4.5%, very close to 11.5 billion euros. The boost as always comes from a significant increase in exports, standing at 8%. The Italian cosmetics market should therefore register a +1.9%.
Pharmaceutical
Source: Federfarma, Prometeia
The net pharmaceutical expenditure of the Italian health service (SSN) in 2017 dropped by 1.9% compared to 2016. This is due to the decrease in the number of SSN prescriptions (-1.2% compared to 2016) and the reduction in the average value of the prescription (net -0.7%, gross -0.4) and therefore the average price of pharmaceutical products prescribed under the health service scheme (-0.7%).
According to IQVIA data, the decrease in spending and consumption corresponds, in 2017, to a significant increase in expenditure (+ 13.3%) and the number pharmaceutical products (+ 11%) provided under the DPC scheme. This, compared to an increase in total expenditure on pharmaceutical products purchased directly by public facilities, which in 2017 stood at + 3.9%.
According to Prometeia’s analyses, the production of the pharmaceutical sector in 2018 was seen to have increased by around 2.2%, while the Italian national pharmaceutical expenditure has decreased: the latest data available for the first three months of the year show a -5%. Hence the drop in expenditure on pharmaceutical products provided by the pharmacies under the health scheme continues.
A reminder that the Italian Institute of Packaging databank monitors the performance of the pharmaceutical sector by only analysing the area of ethical and OTC drugs sold in pharmacies, with a medical prescription, thus excluding pharmaceutical products used in hospitals and or by vets.
Furniture and furnishings
Source: “Forecast Report on the Furniture Market 2018-2020”
The sector’s global economic situation is certainly positive: in 2018 the world furniture market should in fact put in a + 3.5%.
The Italian market is also firmly on an upswing, also thanks to the “furniture bonus”, registering a + 1.3% in 2017.
Growth rates are expected to stay at around 1.3% over the next three years, thanks to a positive climate that involves companies and families. This can also be put down to a recovery in residential investment, as well as a moderate increase in household income, amounting to 1.2%, thanks to low inflation.
In terms of foreign trade Italy does not rank as a major furniture importer. Italy’s largest supplier is China, with a 27% share of total imports; followed by Poland, with 17%, Romania, with 11%, Germany, 10%, and then Slovenia, Spain, Turkey, Vietnam, with percentages between 3 and 2%. However, Italy is one of the largest furniture exporters in the world.
Chemical products
Source: Federchimica
After a very positive 2017, when production figures featured a growth rate of + 3.5%, the uptrend continues into 2018, albeit at somewhat slower rates. In fact, in the first quarter the sector registered an annual growth rate of + 1.5%, slightly lower than the European average, which is around + 1.9%. Due to the fact that it is “upstream” of almost all the production sectors, the chemical industry is a good thermometer of manufacturing activities and the climate of faith. In the current situation of uncertainty, both nationally and internationally, there is a certain caution in the purchase of chemical products, in order not to have too many goods in stock: an attitude that, at the beginning of the year, was also reinforced by a hoped for drop in the prices of chemical products.
In 2018 exports are growing at a slower pace than in 2017: on the basis of the data for the first few months of the year, a 4.2% increase was registered. In particular sales to non-EU countries showed a slowdown.The outlook for the first half of 2018 is an increase in production of around 2%.
Fashion System
Source: SMI Italy Fashion System
In 2017 the Italian textile-fashion sector closed with an annual growth rate of +2.4%. Exports enjoyed a good performance in all 12 months, closing with a +3.5% compared to 2016. This increase involved both materials (yarns) and finished products. In 2018, imports grew globally by 1.9%, with textiles at +3.3% and the clothing-fashion sector at + 1.3%.
According to the very first analyses of the Confindustria Study Center for SMI, 2018 sees a continuation of the positive trend of 2017. Based on the analysis for the first quarter of 2018, a +1.5% is registered compared to the same period last year.
The textile sector began 2018 with a growth of +3%, that of clothing-fashion shows more contained trends, not exceeding +0.6%. The foreign market grew by 3.2% for companies in the textile sector, while those in the clothing-fashion sector registered a +2.6%.
Economic Outlook
According to the latest ISTAT surveys, the Italian GDP is expected to grow by 1.4% in real terms in 2018, supported by domestic demand, which should register a +1.5%. Household consumption decreased slightly, but this is seen to be offset by the growth in investments.
It is also expected that in 2018 employment should increase by 0.8% and the unemployment rate will go from 11.2% in 2017 to 10.8%.
The coming months should see a gradual rise in the inflation rate towards 1% and at the end of the year growth should accelerate.
Projections for GDP in 2019 (source: IMF) are + 1.1% for Italy and + 2% for Europe.
According to Confindustria
According to the latest estimates of the Confindustria Study Center, the global GDP shows growth but with signs of slowing down in some countries: downside risks are on the rise. This certainly determines the situation related to trade duties.
As far Italy is concerned, according to Confindustria, industrial production grew by 0.7% in May, partly recovering the 1.3% drop registered in April. A further rise is estimated for June.
Italian exports also decreased during the April-May period: the 0.8% drop is added to that of 2.4% for the first quarter of 2018. Confindustria also registered the risk of weakening domestic consumption, essentially associated with possible increase in the propensity to save.
As far as the Eurozone is concerned, the slowdown in GDP and industrial production at the beginning of 2018 had led to the hypothesis of the first symptoms of a downturn in economic performance. In actual fact, in the months of April and May, a recovery of the main indicators was experienced, which in particular affected the most important geographical area from an economic point of view, Germany.
According to Prometeia
Up to July 2018 (time at which this report was drawn up) there were no changes regarding the forecast of the manufacturing activity for the current year. 2018 should therefore close with a growth hypothesis of 2.4% at constant prices, which should turn into a +2.1% for 2019, and a +1.8% for the two-year period 2020/2022.
Exports are seen to be accelerating progressively (+3.5% in 2018, +3.4% in 2019 and +3.4% in the average 2020-2022).
In May the seasonally adjusted industrial production index drawn up according to the Prometeia data and elaborations, registered a +0.7%. All the main sectors show growth.
Prometeia’s forecasts for the month of June show an industrial sector that still shows growth, even if to a lesser extent, at 0.5%.
Given these forecasts, the second quarter of the year would have the same trend as the first, showing a drop of 0.1%.
