It
’s time to draw a balance for industrial sectors, and also Acimall, the Italian association of woodworking machinery and accessories manufacturers, looks back to a year 2016 that was quite satisfactory on the export side.
The strong export propensity of Italian companies is a given. Approximately 75% of revenues come from abroad, so accurate trend analysis is essential to understand where and how business is going.
The favorite destination of our products has always been the European Union, and also this year there is no big surprise: 729 million euro and 52 percent share are the figures for 2016, achieving 8 percent growth from the previous year. The mature markets of France and Germany were stable, exceeding 90 million euro each, and also purchase from Belgium remained at high levels.
Poland maintained a fast growing trend, as local buyers better leveraged European Union funds and several Italian companies launched structural internationalization processes in the Polish market. Both factors increased the relevance of this market.
Looking at other countries, Spain deserves special mention. The Spanish market suffered the most during the crisis years, losing approximately 60 percent of its turnover. In the past two years, Italian companies have found fertile land again, with 53 million euro machinery exported in 2016.
Another “surprise” in the year under scrutiny was the United Kingdom. Despite Brexit looming and currency uncertainties for the coming years, in 2016 Italian manufacturers sold over 100 million euro products to the UK. This results requires deeper insight, and if you look at the historical trend, this is clearly a peak that will be hard to repeat in the future. The situation should therefore be closely monitored in the first period of 2017.
To complete the EU review, we consider worth mentioning the Balkan region, especially Italy’s neighbor countries. Croatia and Slovenia are significant markets, and if you add Serbia-Montenegro and Bosnia-Herzegovina, the total value of this area in terms of export reaches 38 million euro. Geographical proximity, no import barriers and cultural affinity offer a competitive benefit to our companies, compared to Germany and China.
Moving outside the European Union, Russia definitely needs some consideration. The Euro-Asian subcontinent was strongly affected by political tension. International sanctions, ruble devaluation and credit crunch have summed up to a very difficult situation, as clearly indicated by the 2016 performance. 34 million euro, despite 8 percent growth, is a poor result compared to pre-crisis levels, which had gone up to 100 million euro. In this situation, we should duly take into account the development of a “black” market. To avoid sanctions, this market “niche” is estimated to have expanded significantly in recent years. This factor represents a potential risk to the correct evaluation of the Russian market.
Among European countries we can include Turkey, which is going through a turbulent political period, but nevertheless is maintaining high levels of industrial activity. In 2016, Italian manufacturers exported over 40 million euro equipment, reaffirming their proactivity in this region. It should be noted that, in recent years, Turkey is trying to develop its own manufacturing industry (supported by state incentives), mainly focused on secondary wood-based panel operations.
Let’s move on to the African continent. The share on Italian export is 2.8 percent. The markets in Northern Africa, traditionally profitable for the Italian industry, are going through enduring crisis, and there seems to be no end in sight. Libya, Egypt and Tunisia together amounted to 8 million euro in 2016, versus 30 in the pre-crisis period. For sure, Morocco and Algeria currently offer more stability for business.
Looking at North America, it is worth commenting upon the US market trend, currently the top destination on a global scale with more than 150 million euro. In the past three years, the US have been experiencing a booming trend in the woodworking technology market. It was the first international market to start the recovery process and it has constantly followed an expansive trend. There are various globalization processes under way, from export to joint ventures, and the opening of sales subsidiaries. In the wake of the United States, Canada also gained twenty percent points, reaching 24 million euro.
On the opposite, South America is experiencing its worst phase. Brazil, traditionally the biggest destination market in the continent, lost over 70 percent, dropping to an all-time low of 11.6 million euro. In this particular situation, we should consider the role of local manufacturing branches, which are not included in export figures, of course. Argentina, another poorly performing market in recent years, purchased technology for a value of 9 million euro, basically the same as in 2015.
Let’s go to the opposite side of the world and take a look at Eastern markets. The Middle East acquired 49 million euro equipment, with a 3.5 percent share. The top-two markets in this region are the United Arab Emirates and Israel, with 14.7 and 12.8 million euro respectively.
Moving to the Far East, China is the most important country by far. This region recorded very interesting growth rates in 2016, equal to 33.3 percent. A factor of uncertainty is the globalization process, still hindered by the strong competition of local manufacturers in the domestic market. Italian companies exported technology for a total value of 67 million euro in 2016.
Also India, which has still not accomplished the promise to become a top market, recorded a significant result. 24 million euro and 40 percent growth are significant figures, but uncertainty still remains for 2017. The Indian market has always been attractive for Italian manufacturers, who have often come across serious problems in the internationalization process. The lack of effective partners, users with poor skills for advanced technology, and price-sensitive demand are historical issues in the Asian subcontinent, which however has an impressive latent demand with one billion inhabitants.
South-East Asia is still a “land of opportunity” for Italian manufacturers: Indonesia, Malaysia, Singapore, Thailand and Vietnam together reached 40 million euro turnover, with a slight increase from 2015.
The final stage of our review is Oceania, which is basically represented by Australia. Despite the long distance, the interest of Italian companies is growing and internationalization processes are very active. In 2016, Italian machinery export passed the 30 million euro threshold, almost twice as much as in 2015.
