In the third quarter of 2023, machine tool orders experienced a significant 19.9% decline, according to the Economic Studies Department & Business Culture Centre of UCIMU-SISTEMI PER PRODURRE. Both domestic and foreign markets faced reductions in order intake. Barbara Colombo, President of UCIMU-SISTEMI PER PRODURRE, attributed the decline in domestic orders to a general downturn in demand and emphasized the need to complete the digital transition within the Italian manufacturing industry, especially in light of sustainability directives. She also called for comprehensive government measures to support competitiveness and internationalization efforts, especially in more distant markets like Asia.
The Economic Studies Department & Business Culture Centre of UCIMU-SISTEMI PER PRODURRE has reported a substantial 19.9% decline in machine tool orders during the third quarter of 2023 compared to the same period in 2022. This decline reflects the challenges facing the industry, with both domestic and foreign markets witnessing reductions in order intake.
Key Highlights:
- Domestic Orders Plunge: Orders within the domestic market took a significant hit, experiencing a sharp decrease of 45.1%. The absolute value of the index for domestic orders stood at 24.
- Foreign Orders: While foreign orders also reported a decrease, it was less pronounced at 1.7%. The absolute value of the index for foreign orders reached 96.2.
Barbara Colombo, President of UCIMU-SISTEMI PER PRODURRE, commented on the data, stating, “The data compiled by the Economic Studies Department & Business Culture Centre confirm the negative trend that we have been observing since the beginning of the year, which has been determined by a number of different factors.”
Domestic Market and Sustainability: Colombo explained that the decline in domestic orders was expected as it corresponds to a general downturn in demand following strong growth in recent years. However, she emphasized the importance of completing the digital transition in the Italian manufacturing industry, especially in light of new European directives on sustainability and green manufacturing.
Colombo continued, “As this transition represents one of the main factors of competitiveness for Italy’s economic system, which has the manufacturing industry as its cornerstone, it is necessary to support it through appropriate measures.”
Government Support and Measures: While recognizing the constraints of limited economic resources and a challenging economic context, Colombo expressed the need for policies that foster development. She welcomed the inclusion of measures such as the re-financing of the Sabatini Law, incentives for companies returning to production in Italy, and tax cuts in the draft for the 2024 Budget Package.
However, Colombo stressed the importance of strengthening competitiveness measures within Plan 5.0, which remains pending. She called for prompt action at the EU level to secure resources for the RepowerEU Plan, which includes measures for Italy’s industrial transformation.
Colombo outlined additional recommendations, including increasing tax credit rates for investments in new production technologies 4.0. She also proposed a modular system of tax incentives to reward those investing in new machines, particularly focusing on digital sustainability and the twin transition.
She emphasized the need for a comprehensive approach that accommodates companies at various stages of their digitalization journey and called for attention to more distant markets, notably Asia.
Foreign Orders and Market Dynamics: Despite the challenges, foreign orders showed a more stable performance compared to domestic orders. North American demand, in particular, remained robust, with the United States being a significant export destination.
Colombo expressed hope for Europe and especially Germany to return to strong market activity, potentially benefiting Italian manufacturers present in German value chains. However, she also pointed to global instability resulting from the Middle East conflict, which could create further market uncertainties.
Colombo urged special attention to more distant markets, including Asia, where the market presence is complex for Italian companies, primarily composed of SMEs. To address this, UCIMU is actively supporting internationalization activities through initiatives like the ITC India and IMT in Vietnam business networks.
Colombo concluded, “UCIMU is committed to the implementation of new initiatives to support the internationalization activities of enterprises, especially in more distant areas like Asia, where the market presence is much more complex for the Italian companies of the sector that are mostly SMEs.”
