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Column n°72 – 2019

EMO Hannover between the drop in orders and the need for investments

Orders falling, both for the foreign market and for domestic demand. The numbers of the second quarter, which came out amid the third quarter, right at full recovery after the summer break, generated a global shock. In Germany as in Italy, two of the leading nations in the machine tool sector, braking is abrupt and obvious. In Italy, 31% less than the corresponding period of the previous year, with -43% on the domestic market and a less dramatic -28.5% on the foreign market, represent indicators of a situation that is just under a fifth lower than 2015, not exactly a record year in the Italian manufacturing industry. As far as Germany is concerned, the drop is decidedly smaller, around 20%, mainly focused on non-European markets, while in Europe the decrease in orders is around 5%. Part of the picture is the fact that for Italian manufacturing companies, Germany, especially car companies, represent a large part of foreign orders and are therefore largely a party to the drop in orders by more than a quarter.
The reasons for the decline, largely expected, but certainly surprising in proportions, especially after a generally positive 2018 and in Italy far more than positive, are varied: on the one hand the political instability weighs, which penalizes the machine tool market on a global level, to the point that in Asia and the Far East they are certainly not faring better than in the Old Continent; on the other hand, instead, the decline in the orders of the automotive industry, influenced by the conversion of the plants towards new engines, to which is added a general difficulty of the automobile market, decisively influences.

In Italy, then, industrialists complain of an intermittent policy of investment cuts, first blocked and then relaunched by the Growth Decree: in conclusion, companies are asking for stable policies with regard to hyper-depreciation and super-depreciation, practically calling for stabilization of incentives, which, by nature, would also be positive from the point of view of increased orders and purchasing power, while on the other it would establish the principle that Italian companies fail to develop the market without state aids, a principle indeed dangerous. If structural changes are to be introduced, then more than on incentives to purchase it would be advisable to intervene on tax wedge and taxes on labor.
In short, it is in a climate of substantial uncertainty, also linked to the need to introduce technological innovations relating to Industry 4.0, an action that is not easy in a period of declining orders, that we are going to Emo Hannover: an edition not among the best, both as far as the climate in the corridors is concerned, both for the actual interest of the visitors, but certainly a fundamental moment to take stock of the economic situation and the initiatives to be taken.