Economic activity Sharp drop in Italian machine tool orders

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The Ucimu report for Q1 2024 reveals a sharp drop in machine tool orders compared to last year, with declines in both domestic and international markets. Ucimu's President Barbara Colombo remains hopeful but stresses the need for clear government action to stimulate domestic demand and reassure investors.

In the first quarter of 2024, the index of orders for machine tools, compiled by the Economic Studies Department & Business Culture Centre of Ucimu-Sistemi per produrre, showed a decline of 18.9 percent compared to the period January-March 2023. The absolute value of the index was 77.9 (base year 2021=100). The negative result is due to the decline in orders received by Italian manufacturers, both on the domestic and foreign markets. In particular, foreign orders fell by 18.5 percent compared with the same period of the previous year. The absolute value of the index was 91. On the domestic front, new orders marked a fall of 19.4 percent compared with the first quarter of 2023, for an absolute value of 55.1.

Barbara Colombo, president of Ucimu stated: “The year 2024 has thus started with a negative sign for Italian machine tool manufacturers and, although this is a confirmation of what we were expecting, we must now overcome the impasse, giving the market a clear sign of reassurance and stability, a fundamental condition for those who have to invest in state-of-the-art machines”.

As far as exports are concerned, Ucimu expects a positive trend for the current year: The association predicts a moderate pace for our business in the United States and an increase in sales to some European countries and to countries that are beginning to rise in the ranking of destinations for Made in Italy in the sector, such as Turkey, Mexico and India. This is also the reason why Ucimu has taken the first steps to create a new network of companies in Mexico, which is experiencing an intense development in the manufacturing sector, closely linked to the US economy.

On the other hand, a different assessment concerns the domestic market, whose demand has been on standby for several (too many) months, waiting for the new competitiveness measures to come into force. Manufacturers continue to receive requests for quotations from their customers, even for important projects, but these remain on hold because there is no certainty about the incentives that will be provided by the government. “The current situation incredibly remains more nebulous than even a month and a half ago, when the legislative decree was presented with the Transition 5.0 framework. In this regard, to date no implementing decrees have been issued, whereas, as for Transition 4.0, the change to the rules “along the way” for accessing the measure risks blocking domestic demand irreparably,” says Colombo and continued: “As soon as possible, the Government must settle this issue that is crucial for the development of the Italian manufacturing sector, so that companies can finalise the necessary investments in production technology. After all, the growing number of applications from Italian and foreign exhibitors to exhibit at 34.BI-MU, scheduled to take place at Fieramilano Rho next October, is a testimony to the trust in the market placed by the companies of the sector”.

He warned that time was running out for 5.0 measures. The use of the measure, which rewards investments that combine digitalisation and energy savings, is limited in time. In line with the deadlines set by the NRRP (National Recovery and Resilience Plan), the deadline for delivery of goods to take advantage of 5.0 is 31 December 2025. This means that the rules of engagement, i.e. the implementing regulations to take advantage of these measures, must be in place very soon, otherwise such a severe time compression between the time of order and the time of delivery will force us to forego a substantial part of the market demand. “Do we really want to risk all this?” asked Colombo. “On the other hand, for the 4.0, the market was moderately destabilised by the Government’s decision to include the obligation of prior notice with regard to the value of investment to be made and the allocation breakdown of annual instalments for the related tax credit, based on what is also provided by Transition 5.0”.

“Although we understand the need of the State General Accounting Office to have, in advance, a timely picture of the economic resources needed to cover the procurement operations made under 4.0, it is also true that changing the “rules of the game” in the process creates great distrust among those who are considering the opportunity of making new investments. For this reason, we ask the authorities to take immediate action to explain all these aspects. We are confident that the clarity and speed with which the Government will account for the details that are still missing will allow Italian demand for new production technologies to restart with a lot of impetus,” concluded the president of Ucimu.

(ID:50029463)