Apulian manufacturing in agony amidst the rising prices of gas and other raw materials

Apulian manufacturing in agony amidst the rising prices of gas and other raw materials
Apulian manufacturing in agony amidst the rising prices of gas and other raw materials
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LECCE Apulian manufacturing in agony. The price increases of oil, gas, coal and other raw materials are increasing the costs for companies to such an extent that their very survival is at risk. The expenses for energy needs, in particular, are now unsustainable.

This is what emerges from the new study conducted by the Aforisma Economic Observatory, directed by Davide Stasi. Many local entrepreneurs find themselves at a crossroads: to continue the business, getting into debt, or to suspend it, waiting for better times to restart or permanently close.

“The uncertainty of not making it is too great – explains Stasi – due to the progressive accumulation of debts that grow month after month, also due to costs and increasingly fierce competition, favored by globalization. So much so that, even before the outbreak of the war in Ukraine, the Apulian manufacturing was retreating, recording a haemorrhage of industrial and artisanal companies such as to fear a real desertification of the economic fabric. The transformation sector, which is the most energy-intensive one, is put on the ropes by the surge in costs. The macroeconomic scenario – adds Stasi – is characterized by fluctuations in the prices of raw materials (energy and non-energy commodities), by the growth of inflation and by the distorting effects on supply chains. The geopolitical tensions due to the Russian invasion of Ukraine have also added to the pandemic that is still evolving. These negative elements are strongly affecting the prospects of the Italian economy for the two-year period 2022-2023. The latest forecasts indicate a progressive downsizing of the dynamics of gross domestic product. The constant increase in inflation is compressing the spending power of households, reducing their consumption and also cutting the profit margins of companies, especially those energy-intensive or those companies that need large quantities of electricity or gas to carry out their own activities. More briefly, rising costs and shrinking domestic and foreign demand will weigh on the economy. The real recovery is therefore postponed, because, in line with the national context, encouraging signs of recovery of the wealth that had decreased during the recessive phase induced by the pandemic were also seeing in Puglia ”.

After the heavy fall in GDP, caused by the blocking of production activities to contain the spread of Covid-19, industrial activity seemed to restart. The effects of the pandemic and the recession have been and still are strongly unequal between the areas of the country (between the North and the South), but if the analysis, instead, is carried out by sectors and not by territories, the manufacturing sector which is the more dependent on oil, gas and other commodities, it risks dissolving, losing human capital, resources and skills that are handed down from generation to generation.

The commerce sector recorded, yes, a negative balance of -1,813 activities (from 97,781 to 95,968), but, in percentage terms, this decline translates into a drop of 1.9 per cent. The contraction in the manufacturing sector, on the other hand, was 2.9 per cent (-720 fewer activities, from 24,592 to 23,872).

What is worrying is the negative streak that has persisted for too long. While, between ups and downs due to pandemic lockdowns, trade manages to recover, manufacturing, on the other hand, which is the sector for the production of goods and the transformation of raw materials (agricultural and otherwise), records a negative “trend change” that goes been going on for over 12 months. By trend variation we mean the current month and the corresponding month of the previous year.

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If manufacturing has not yet disappeared, it is also due to trade with foreign countries which remain good. But it should be noted that this year exports grew above all in terms of value: from 4.1 billion euros in the first half of 2021 to 5.1 billion euros in the first half of this year, not in terms of product. this growth is much more contained.

The increase, in fact, is only in value, because inflation has increased prices, but the number of products is almost similar to last year.

The Apulian economy is transforming with the passage of time: it is losing its industrial and artisan manufacturing vocation, giving more space to tourism, consisting mainly of accommodation and catering activities.

The article is in Italian

Tags: Apulian manufacturing agony rising prices gas raw materials

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