Food industry: first observations

After a tough start to the year, in mid-2017 the Italian food industry is showing signs of recovery, putting in a good performance in exports, also thanks to the recovery in global trade, while domestic consumption is hard put to take off. (Source: Federalimentare)

Considering the economic run of things in the current year, the progressive improvement in performance in the food sector is primarily due to the trend in production: If in January it started out with a -3.7%, it concluded the first quarter with figures moderately on the up (+0.2%) in May making a remarkable leap forward of as much as +4.0% over the same month the previous year and with the same number of workdays.
Hence the progressive figures for January-May have risen to +1.1%, replicating 2016 figures (the best since 2010) and foreshadowing further growth prospects in the second half of the year.

Exports. After the sizable swings in January and February, the first quarter neared the 7.3 billion euros, up 7.1% on January-March 2016.
The positive impact on exports was much due to the significant recovery in world trade after a two-year low, confirming what the best economic research centers have forecast.
After +2.0% in 2015 and a more meagre +1.4% in 2016, a rise of +3.9% is expected in 2017, followed by +3.3% in 2018. The driving factors are the restart of a new global cycle, as well as investments, the strengthening of manufacturing dynamics, which are always very active in trade, and the strengthening of international value chains. However, certain structural elements continue to “weigh” underneath, restraining the return to the drive world trade enjoyed a decade or so ago, when growth was around 7% a year.

Italian domestic consumption. In the current economic situation, domestic consumption continues to show the worst results: figures in terms of volume appear to be marking time, although they are 0.9% up in terms of value in June’s consumer food prices trend. It should be added that the recent cooling down of inflation, which in June posted +1.2% after +1.4% in May, is not a good sign. Hence it appears clear how production’s good performance is once again mainly due to exports.