The slight drop in production recorded in the industrial machinery sector in 2019 (-3.8%) turned into a real slump in 2020: -34.6%.
A figure determined by the drop in exports to foreign countries (- 27.2%) and the contraction of demand in the domestic market (with a reduction of over 43%). The uncertainties of the international economic scenario weigh on a sector that in 2019 alone produced a global turnover of over 12 trillion dollars, equal to 4.3% of global GDP.
With more than 860,000 employees, the sector plays a leading role in Italy, capable of generating 28% of the added value of our manufacturing industry and 4.7% of the national total.The industrial machinery macro-sector encompasses a wide range of sectors, including mechanical engineering: of the industry’s 120 billion in exports, 80 billion derive from the products of this sector. This is internationally recognised excellence, with a turnover second only to Germany in Europe.
These figures immediately give an idea of the centrality of machinery industry in the Italian economy, which has been hard hit by the crisis of the past year.
According to research carried out by Cassa Depositi e Prestiti, EY and Luiss Business School, over 77% of employees saw a sharp drop in the number of hours worked during the first lockdown due to the production shutdown. The year 2020 was also marked by the cancellation of trade fairs, which have always been considered fundamental for the internationalisation of SMEs.
In this gloomy picture, however, there are positive signs.
Indeed, data provided by Oxford Economics speak of a decisive upturn in investment in production technologies worldwide in 2021 (+15.1%): the positive trend should continue over the next three years, with European companies ready to regain lost ground. Italian companies in the industrial machinery sector are no exception from this point of view.
It will be essential to continue to invest in product and process innovation, integrating digital technologies more and more closely into the products‘ design, production and distribution. We are referring, for example, to the use of industrial analytics systems to manage risks through advanced forecasting models or the use of Big Data to identify problems along the supply chain.
The theme of digital transformation is also closely linked to the creation of new partnerships: Fabio Scovolo of Flecte Srl, a company specialising in the production of tube-bending machines, told us that thanks to Artificial Intelligence it has managed to find foreign distributors. You can find details of his story at this link.
In other words, market analysis based on the use of new technologies will be decisive for the future of a macro-sector such as machinery, where supply chains are complex due to the high specialisation of certain components, which are therefore difficult to replace. In addition to this, there are trends in countries such as Ukraine, Belarus and Uzbekistan, where demand for industrial machinery is expected to increase in the coming years and where there is a consequent need to be present in these markets.
Reliable data on potential partners in these areas will be crucial – a goal that should also be pursued by SMEs looking to seize new opportunities in 2021.