Packaging status report – May 2017
A four-month survey of the packaging industry as of May 2017. The information relating to the global economy is based on Confindustria and Prometeia data.
Below is a snapshot of the performance of manufacturing sectors that consume the most packaging, divided into the macro-areas of food and non-food. A similar report on the performance of the packaging sector will follow.
The medium-term performance analysis of these sectors during 2017 is based on Prometeia data.
FOOD
Food and beverages. Following conspicuous growth in various areas in 2015, 2016 saw a certain degree of stabilization for this industry; in the medium-term we should see about 1.2% growth, driven by the push toward internationalization affecting even small and medium operators thanks to the opportunities offered by e-commerce.
NON-FOOD
Automobiles and motorcycles. These industries should continue to grow as both families and businesses continue to replace old vehicles with new ones, albeit not at such a high rate as in previous years. This sector’s growth is higher than that of manufacturing generally, hovering around +2.5%.
Consumer goods. This sector has proven to be one of the most dynamic manufacturing industries thanks to a winning mix of structural growth in demand and highly competitive Italian operators. This sector’s growth is also beating that of manufacturing as a whole, with approximately 2.2% growth.
Mechanical engineering. This sector has suffered from unfavorable demand conditions of late, both in Italy and abroad. Italian concerns in this sector, which are traditionally strong performers in the production of high tech machinery, will benefit from the government’s “Industry 4.0” national plan for manufacturing. Once the incentivization period ends, they will benefit from a more conspicuous presence on international markets. Medium-term growth should hover around 2%.
Electric power. According to Prometeia, this industry will be able to benefit from infrastructural projects and investments relating to the environment (renewable sources, electric vehicles, etc.). In the domestic market, it will also ride the wave of urban development. Medium-term growth will be about 1.5%.
Metallurgy. Metal production is beating manufacturing at +2.2% thanks to an expected resolution of criticalities in the steel industry and favorable domestic demand conditions.
Construction products. This sector’s growth is slightly lower than that of manufacturing as a whole, with a trend that should settle at about 1.2%.
The same trend goes for metal products and other intermediate ones; in the case of the latter, the worst performer is chemical products, in spite of construction’s recent growth. Italian firms should be able to carve out a space for themselves between EU and non-EU producers by developing alternative products with high added value.
Electronics. Italy will have to face major competitive challenges in a market with high demand, driven in particular by electronic products. Growth in this sector should remain limited to about 1.3% as Italian operators struggle to compete in a complex market that is increasingly conditioned by major players.
Furniture. Growth is expected to be slow in this sector due to a high competition.
Growth is expected to average +0.8%, in spite of global demand that is expected to rise, including for Italian products, which are very strong in the high end market.
Fashion. Emerging markets will keep a close eye on the Italian fashion system, a sector showing average annual growth of approximately 1%.
Electric home appliances. The worst performer among Italian industries, this sector is expected to see a stabilization of production levels as it focuses on offering quality products.
General economic outlook
According to Confindustria
The Italian economy remains on the slow, see-sawing path to recovery that began in 2015. Qualitative indicators are much more positive, suggesting an acceleration. Quantitative data has thus far not corroborated as much: during the first quarter of 2017, weak industrial output (in manufacturing in particular) slowed the GDP. However, the Italian economy’s longer-term prospects should ensure growth, driven by exports in particular.
According to Prometeia
By the end of 2017, Italian manufacturing will be growing at a faster rate than in 2016, with nominal growth of +1.6%. This recovery will then also be consolidated in the medium term (+1.5% average annual growth during 2018-2021).
Exports will see a progressive acceleration (+2.4% in 2017, then an average of +3% during 2018-2021).
In the coming years, Italian operators’ ability to successfully compete in foreign markets will be crucial, as domestic demand suffers from a slowdown in domestic consumption.
Barbara Iascone
