#SoseXpress - Press Review March 26th/April 1st 2021

The Recovery Plan is a complex organizational challenge. It requires a strategic vision and planning skills: we will complete the work in the coming weeks to make it a tool to develop and redesign the country  

Daniele Franco, Minister of Economy and Finance, speaking in the Chamber on the Recovery Plan. 

The Debate of Ideas  

 

How to tackle SMEs' liquidity crisis? 

Facing the business crises induced by Covid means facing the liquidity crisis of most business realities that make up our country's economic fabric. The pandemic context has imposed new challenges regarding this problem. In Italy, the restructuring tools are various, but they have shown some critical issues that the new Code of the crisis has not solved. An article written by economists and jurists published on La Voce.info analyses two tools: debt restructuring agreements and voluntary arrangements with creditors. Here the article published by LaVoce.info. 

 

Studies, research and numbers 

 

Bank of Italy, €-Coin increases again 

The euro-Coin indicator is constantly improving. According to the Bank of Italy, in March, the indicator shows new signs of recovery in the European economy: it rose to 1.36 points, compared to 0.96 in February. The manufacturing firms' confidence is recovering and there is less pessimism in the service sector. The world trade's good recovery is helping the industrial production. Here to learn more. 

 

ISTAT quarterly account: households’ income down at the end of 2020, consumption down, tax burden increases 

At the end of 2020, the tax burden was 52.0%, up by 1.3 percentage points. According to Istat, in the fourth quarter of 2020, the Gross disposable income of Consumer households decreased by 1.8% compared to the previous quarter, and the final consumption expenditure decreased by 2.5%. The saving rate of Consumer households was 15.2%, an increase of 0.5 percentage points compared to the previous quarter. Finally, Istat reports that the Gross disposable income of Consumer households decreased by 2.1% in real terms compared to the previous quarter". Here to learn more. 

Industry: production remained stable in March 

The Italian industry stopped growing in March (-0.1%, after + 0.6% in February and + 1% in January), but an increase of 1% is expected in the first quarter of 2021 compared to the last quarter of 2020.  According to the monthly survey on industrial production by the Confindustria Research Department, "despite the increase in restrictions in Italy, the industry confirmed a good performance, thanks to the acceleration of foreign demand. " Domestic market is "less dynamic due to the limitations in moving and carrying out some activities. In the first quarter the tertiary sector affects the dynamics of GDP, expected to be marginally decreasing". Here the analysis. 

  

Istat, Slight drop in GDP (-0.7%) in the Euro Zone 

In the fourth quarter of 2020, the Euro Zone GDP decreased less than expected (-0.7%), while in 2020 the fall in economic activity stood at 6.6%. The negative effects mainly concerned service sector while the impact on the industry was milder, thus mitigating the fall in GDP. Overall, GDP is expected to decline in the first quarter (-0.4%) and then recover both in the second (+ 1.5%) and third quarter (+ 2.2%). Here to learn more. 

The Bank of Italy-Ministry of Labour_ Since the pandemic outbreak, 300 thousand fewer jobs 

At the end of the period from the pandemic outbreak (1 March 2020) to 28 February 2021, new jobs decreased by 300,000 compared to the previous twelve months; after the lowest level registered in mid-June (a decrease of 600,000), about half of the gap was filled. According to a joint note by the Ministry of Labour and the Bank of Italy, in the first two months of 2021, the balance between open job positions and those covered remained approximately at the same levels as in 2020, immediately before the pandemic outbreak (-65 thousand in January, -55 thousand in February). Here and here for further information. 

Istat: in February, industrial producer prices returned to growth on an annual basis

In February 2020, industrial producer prices increased by 0.5% on a monthly basis and by 0.7% on an annual basis (from -0.3% in January). Istat released these data, adding that, without considering the energy sector, the growth in the period is slightly more contained (+ 0.4%), compared to the trend growth (+ 1.2%). Istat also revealed that in the quarter from December 2020 to February 2021, industrial producer prices recorded an increase of 1.7% compared to the previous three months. Over the last three months, the growth is more significant on the domestic market (+ 2%) than on the non-domestic market (+ 0.9%). Here the note by Istat. 

The Bank of Italy, half of the Italian families have difficulty paying their rent or home loan 

Almost 40% of tenants and over 30% of indebted families declared having difficulty paying the rent, mortgage, or loan payments. During the second pandemic wave, economic conditions worsened compared to the summer. In 2020 one-third of families reported a reduction in income; among these, only one-fifth forcast a recovery in 2021. The extraordinary survey conducted by the Bank of Italy on Italian families outlined this dramatic scenario at the end of November 2020. Here to learn more. 

IMF: in 2021, Italian GDP will grow by 4.25%  

According to the International Monetary Fund, Italy's GDP could grow by 4.25% "in 2021, with a weak start followed by an acceleration in the last part of the year. Covid hit Italy hard, but the response has been effective even if the prospects of the Italian economy, linked to the development of the pandemic and support policies, remain uncertain. Here for further information. 

Istat: in Italy, inflation up to 0.8% for fuels in March 

In March, the national consumer price index recorded an increase of 0.3% on a monthly basis and 0.8% on an annual basis (from + 0.6% in February), which had not happened since May 2019. This emerges from the preliminary estimate released by Istat. The slight speed up of inflation is mainly due to the trend reversal of prices of non-regulated energy products (from -3.6% to + 1.7%). Here for further information. 

Eurostat: in 2020 hourly labour costs ranged from € 6.5 to € 45.8 in the EU

In 2020, the average hourly cost of labour across the economy (excluding agriculture and public administration) was estimated to be € 28.5 in the EU and € 32.3 in the euro area, up compared to 27.7 € and € 31.4 respectively in 2019. These estimates come from data on labour costs published by Eurostat. The average hourly labour costs mask significant gaps between the EU Member States, with the lowest hourly labour costs recorded in Bulgaria (€ 6.5), and the highest in Denmark (€ 45.8). Within the euro area, the largest increases were recorded in Portugal (+ 8.6%), Lithuania (+ 7.5%) and Slovakia (+ 7.0%), the smallest in Luxembourg (+ 0.5%), Finland (+ 0.7%) and the Netherlands (+ 0.8%). Here the note by Eurostat. 

IHS Markit: In March, Italy recorded its highest manufacturing PMI (Purchasing Managers’Index) in 21 years 

At the end of the first quarter, the Italian manufacturing sector speeded up its recovery. In March, the Purchasing Managers' Index rose to 59.8 points, from 56.9 in February. The data indicates an important economic expansion given that the threshold of 50 points, the limit between decrease and growth, has been largely exceeded.  According to Ihs Markit, "The March data highlighted yet another acceleration of the recovery in the Italian manufacturing sector," marking the most relevant improvement in the last 21 years. Here to learn more. 

Osservatori.Net: in 2020, e-commerce and digital technologies drove Italian exports 

According to a study by the Digital Export Observatory of the School of Management of the Politecnico di Milano, in 2020, "the Italian digital export of consumer goods amounted to 13.5 billion euro, growing by 14% in line with the pre-pandemic trend, and an incidence of 9% on total exports of consumer goods and 3% on total exports". Fashion is the most important sector (7.1 billion euro, 53% of digital exports of consumer goods, and 16.5% of the sector's online exports); followed by food (46% for a value of 1.9 billion euro, equal to 14% of digital exports and 4% of food exports). Furniture is also on the podium (1.1 billion and 8% of online exports and 12% of those of furniture), followed by electronics, cosmetics, stationery, games, sporting goods. Here to learn more. 

 

The voice of Stakeholders 

 

Unioncamere: in March 2021 employment still far from the levels of 2019  

Companies forecast 292 thousand new employment contracts for March 2021 and 923 thousand for the March-May quarter, 59,000 more than in March of last year but still 88,000 less than in March 2019, when the Covid-19 pandemic had not yet hit the economy. The reduction was particularly marked in the tertiary sectors (-79 thousand) and the tourism sector (-50 thousand). Only construction and ICT show signs of recovery, exceeding the new jobs recorded in March 2020 and 2019. These data emerge from the monthly Bulletin of the Excelsior Information System by Unioncamere and Anpal. Here an insight. 

  

Unioncamere: the new survey on Italian medium-sized industrial enterprises is online 

The new survey “Le medie imprese industriali Italiane (Italian medium-sized industrial enterprises)” (2009-2018) realized by Unioncamere, Mediobanca, and the Study Centre of the Chambers of Commerce "Guglielmo Tagliacarne," was published. The report includes a selection of economic and financial statistics derived from the re-elaboration of data from the 2009-2018 financial statements. The analysed sample includes 3601 medium-sized enterprises representing 16% of the value-added and national export of the Italian manufacturing industry. Here an insight. 

ConfCooperative, despite the difficulties, one cooperative out of two forecasts a recovery 

The confidence climate in the world of Cooperatives is improving as they begin to see the light at the end of the tunnel. Compared to June 2020, 16% of cooperatives are confident of a clear improvement in the short-term macroeconomic situation. These are the main results of a note on the first quarter of 2021, including forecasts for the year, drawn up by the Confcooperative Research Department on a representative sample of over 18,000 companies that employ almost 535,000 people with a turnover of 81 billion euro. Here for further information. 

Unioncamere: Italy, 40% of companies innovated in 2020, focusing on new products, training, and ICT 

Four out of 10 companies used innovation in 2020 to face the effects of the pandemic. Most companies have invested in new production lines or the replacement of the old ones (13.7%), in staff training (13.3%), in IT and telecommunications (12%). 7,8% of the companies allocated resources to research and development, 7.1% to means of transport, and 5.8% to new buildings or their extension. These are the results of an in-depth analysis of business strategies carried out by Sicamera and InfoCamere on over 32 thousand companies within the Sisprint project developed by Unioncamere and the Agency for Territorial Cohesion. Here an in-depth article. 

Coldiretti, for the first time, food exports exceeded imports 

Agri-food exports in 2020 reached a record value of 46.1 billion with an increase of 1.7% compared to the previous year, allowing for an historic overtaking over imports, which instead fell to 43 billion. This turning point offers great opportunities to "Made in Italy" since Italy has accumulated a production deficit of 25% in self-Sufficiency regarding food consumption, from meat to milk to cereals and, except for wine, fruit, and poultry meat. These data emerge from the analysis by Coldiretti based on Istat data presented during the event "Recovery 'Food,' Italy restarts from food" organized with Filiera Italiana. Here to learn more. 

 

Innovation  

 

Employment_Ict bucks the trend, almost 37 thousand new jobs by May

According to the monthly Bulletin of the Excelsior Information System, produced by Unioncamere and Anpal, the ICT and construction sectors are the only ones giving clear signs of recovery, exceeding the level of new jobs recorded in March 2020 and 2019. In the IT and telecommunications sectors 12,560 new jobs are estimated in March, and the number will rise to 36,430 in the March-May quarter. Here for further information. 

Consumption, the tech sector flies in Italy also in 2021

The Italian consumer technology market is growing more and more. Almost all sectors recorded a positive trend at the beginning of this year. The survey carried out by GfK showed that in the first quarter of 2021, the sector recorded a 26.9% increase compared to the same period of 2020. And this increase concerns both the online channel (+ 64% in value) and traditional stores. (+ 18%). The performance of small domestic appliances (+ 31%), consumer electronics (+ 22.7%), and large domestic appliances (+ 20.1%) was also incredibly positive. Here to learn more. 

 

Local Authorities  

 

Local authorities: in 2021, more than 460 million allocated to municipalities

Following the agreements signed within the State-Cities and Local Autonomies Conference on March 26, Minister of the Interior, Luciana Lamorgese, signed the provisions allocating funds to Municipalities to counter the severe economic effects caused by Covid- 19. Here the Press Release by the Ministry of the Interior. 

 

 The World of MEF 

 

G20 Finance Ministers and Central Bank Governors will hold their second official meeting on Wednesday, 7 April 2021 

On Wednesday, 7 April, the press conference at the end of the second meeting of the G20 Finance Ministers and Central Bank Governors will be held virtually under the guidance of the Italian G20 2021 Presidency. G20 members will continue their work in the meeting, adopting a multilateral approach to tackle the global agenda's main challenges. The conference will be chaired by the Minister of Economy and Finance, Daniele Franco, and the Governor of the Bank of Italy, Ignazio Visco, with their deputies, Alessandro Rivera and Luigi Federico Signorini. Here the press release by MEF 

MEF: the borrowing requirement of the state sector decreased

In March 2021, the state sector working balance showed a borrowing requirement of 26,800 million euro, compared to 32,315 million in the same month of last year. The borrowing requirement for the first three months of the current year was 41,000 million, an increase of approximately 10,100 million compared to the first quarter of 2020. Here the press release by MEF.