In the fourth quarter of 2023, the index of machine tool orders, meticulously compiled by the Economic Studies Department & Business Culture Centre of UCIMU-SISTEMI PER PRODURRE, has witnessed a substantial decline of 31.1% compared to the same period in 2022. The absolute value of the index, based on the year 2015 as 100, stood at 92.1.
UCIMU-SISTEMI PER PRODURRE, the official representative of the Italian machine tool, robots, automation systems, and ancillary products sector, stands as a prominent association. With over two hundred associate member companies, it holds sway over 70% of the Made in Italy within the sector. The association’s members, reflecting both value and longstanding tradition, play a pivotal role in representing a sector integral to the entire manufacturing chain. UCIMU’s extensive capabilities and network position it as a key influencer within Sistema Confindustria (General Confederation of the Italian Industry System).
This downturn in the index was predominantly driven by a significant reduction in order intake within the domestic market. Conversely, foreign sales displayed resilience during this period, with orders collected abroad experiencing a modest decline of 2.9% compared to the previous year, resulting in an absolute index value of 100.9. In stark contrast, on the domestic front, orders witnessed a substantial 69.1% downturn, reaching an absolute index value of 79.4.
On an annual basis, the index reflected a notable 24.7% decrease compared to the 2022 average, with an absolute index value of 90.5. Breaking it down further, the domestic index saw a staggering 48.4% decline, with an absolute index value of 74.6, while the foreign index experienced an 11.3% decrease, settling at an absolute index value of 102.8.
Barbara Colombo, President of UCIMU-SISTEMI PER PRODURRE, analyzed the data processed by the Economic Studies Department, emphasizing that 2023 marked a clear reduction in orders received by Italian manufacturers in the domestic market. However, she noted that despite the negative trend, companies are actively engaged, driven by a substantial queue of orders yet to be processed.
Regarding the domestic market, Ms Colombo explained that the decline in new order collections was anticipated and aligns with a general downturn in demand following a previous boom. She highlighted the impact of a waiting effect for new incentive measures expected in 2024, with ongoing discussions by the Government and Parliament on potential new incentives 5.0.
Ms Colombo observed that the delay in decision-making by companies in the last quarter was influenced by the anticipation of clarity on these impending incentives. Drawing a parallel to the previous year, she noted the rush to invest in the last quarter of 2022 to capitalize on the 40% tax credit rate before its reduction in the new year.
She expressed optimism for the future, anticipating a breakthrough in purchasing decisions from the beginning of the second quarter. Colombo emphasized that the introduction of measures 5.0, focusing on tax credits for education, training, and innovation projects for digital sustainability, could provide a modular system of incentives for manufacturing enterprises.
In response to the ongoing digital transition and in line with European directives on sustainability and green manufacturing, these measures aim to support the continued growth of the Italian industry. Ms Colombo highlighted the need to decouple measures from the temporariness of Budget Laws, providing companies with structural fiscal tools for long-term investment planning.
On the foreign front, Ms Colombo stated that order intake remained substantially stable, underscoring a long-term trend showing more consistent performance in foreign markets compared to the domestic market. Italian manufacturers have found a reliable partner in the United States, the primary export destination, compensating for the weakness in Asian and European demands.
She expressed hope for the revival of European and particularly German markets, emphasizing the potential benefits for Italian manufacturers already present in German value chains. Despite geopolitical uncertainties, Colombo stressed the importance of fostering economic activities amid ongoing global challenges.
Highlighting the sales performance in Germany, she noted that in the January-September 2023 period, the latest data available reveals that the sales of the sector under the “Made in Italy” label to Germany reached 244 million euros. This reflects a notable increase of 10% compared to the corresponding period in the previous year. However, it is crucial to note that the value of Italian exports to Germany remains significantly lower than the levels observed before 2018 and is notably lower than the record set in 2008 when it peaked at 465 million euros.
She had also revealed that UCIMU has presented a proposal to the Ministry of Foreign Affairs and International Cooperation. This proposal aims to initiate a dialogue and potential joint actions between Italian and German operators in the sector, fostering partnerships in shared markets of interest for the two-year period 2024-2025. The goal is to enhance the distinctive features of both industries and stimulate collaborative efforts for mutual growth.