Things have gone well for almost all of Europe; raving about Italy’s January exports would be a tad over the top.
But the more-than-13-point surge in exports of ‘Made in Italy’ products (better than Germany and France’s performance) has at least partially reassured the outlook for the entire Italian economy. With domestic demand still at weak levels, reduced growth in consumption, and investments that have yet to materialize, the economy still has to count on exports as the driving force in confirming predictions for 2017 (which had already been less-than-thrilling).
Though outright enthusiasm would be uncalled for, a little optimism seems appropriate, as Italian exports have shown their third consecutive month of growth. This progress has been seen in almost every sector, but especially so for Italy’s traditional strong points: from food to machinery.
Aside from the Netherlands, all of Europe has been seeing plus signs, with improvements in all of Italy’s main export markets: starting with Germany (+9.6%), France (+7.1%), the United Kingdom (+7.5%), and Spain (+12.4%).
German purchases (an additional €380 million) have mainly been in Italy's mechanical sector, with robust growths for machinery (+12%), metals (+24%), and automobiles (+18%).
The real surprises have been found elsewhere, in the non-EU markets, particularly the areas that have suffered the most from political, economic, and devaluation crises that have massively reduced their purchasing levels: primarily Russia and Brazil.
Moscow produced a 39.4% surge, with a near-unanimous upswing that only failed to reach the furniture sector: there were huge recoveries in machinery (+54%), clothing/textiles (+37%), and foods (+69%). These seem to indicate that internal demand is once again strong, both for families and businesses.
Though Russia’s improved purchasing totaled €126 million during the month, the United States was the standout performer, with a 35.8% jolt that nearly reached €800 million in additional exports for Italy.
Orders of large vehicles have certainly played their part, but a quick glance at the sectors monitored by ISTAT reveals that, in reality, US purchases have been very diverse for both families and businesses: for example, furniture sales have grown by 26% and, after a long period of stagnation, machinery has shot up by 37 points.
January went well in China, Japan, and Latin America, and even the area with the worst performance, the Middle East, saw a 1.4% growth.
The situation is similar from the sectors’ perspective, with widespread progress in all of the ‘Made in Italy’ industries (though still positive, only clothing/textiles remains underwhelming): from foods to pharmaceuticals, mechanics to machinery, rubber/plastic to automobiles (+27.7%).
Things aren’t quite so cheerful in terms of purchasing, with imports (+15.5%) on the high end mainly due to the spike in energy costs (+62.5%). This spike was provoked by a resurgence in crude oil prices, which had reached minimal levels in January 2016.
Imports of energy products rose throughout the month to €1.8 billion, thwarting the improvements in the manufacturing sector’s credit balance, and dragging the entire trade balance down into the red.
As such, the bonus from low-cost energy has already been reduced, just like how minimal interest rates will soon be nothing more than a memory. Getting by will be a challenge over the upcoming months and, in light of that scenario, strong exports have been seen as especially-good news.
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