Italian industrial production still in crisis

The Industrial Production Crisis in Italy and Germany

In Europe, both Italy and Germany are facing significant challenges in their industrial production sectors.
While Italy is struggling with a prolonged decrease in industrial output, Germany is experiencing a more pronounced but relatively shorter crisis.

The Situation in Italy

In Italy, the industrial production crisis is particularly affecting durable consumer goods, with a significant 8.7% decline between January and April 2024 compared to the same period in 2023.
This drop is indicative of low consumer spending capacity, driven by inflation and limited savings, as well as uncertain future expectations among both consumers and businesses.

Sectors such as textiles, clothing, leather goods, and accessories have been hit hard, experiencing a 9.9% decrease in production in the first four months of 2024 compared to the same period last year.
The transportation manufacturing industry is also struggling, with a 5.4% decline year-on-year.

The Case of Germany

Germany, on the other hand, has seen a continuous decline in industrial production for ten consecutive months.
Between September and December 2023, the country experienced a 4.5% average decrease compared to the same period in 2022.
While the crisis in Germany is more acute than anticipated, it has been of shorter duration compared to Italy.

The connection between the industrial fates of Italy and Germany is strong, with the Italian industry being heavily impacted by slowdowns in the German economy.
The close ties between the two countries’ industrial supply chains exacerbate the challenges faced by both nations.

Comparison with Other European Economies

According to Eurostat data, Italy and Germany stand out as the main troubled economies in Europe in terms of industrial production.
In contrast, France and Spain are performing relatively well in this sector.

France has shown slight monthly increases in industrial production compared to 2023, with a growth of 0.9% in January, 0.4% in March, and 1% in April.
Similarly, Spain has experienced positive growth, with a 3.7% year-on-year increase in February and a 1.1% rise in April.

Challenges for the Future

The industrial landscapes of both Italy and Germany are navigating uncertain terrains with challenges posed by internal and external factors.
As Germany grapples with a sluggish economy and a transition away from nuclear energy, Italy faces issues of low consumer demand and reliance on industries sensitive to geopolitical conditions and foreign demand.
The interdependence of these two economies underscores the need for strategic and collaborative efforts to address the ongoing industrial production crises.