“Open (again) - A new start for exports“ is the title of the Rapporto Export 2020 Sace presented on Thursday 10 September in a web conference by the company's top management, President Rodolfo Errore and Pierfrancesco Latini, in the presence of the Ministers of Economy, Roberto Gualtieri, and of Foreign Affairs and International Cooperation, Luigi Di Maio.
Every year the Report offers Italian companies a “compass for orientation“, as Alessandro Terzulli, Sace's chief economist, has defined it, who illustrated its contents, which foresee a robust recovery in Italian exports as early as 2021, a recovery that will allow Italian exports of goods to reach 510 billion in 2023.
Exports in sharp decline in 2020
The uncertainties inherited from 2019, the pandemic impact of the Covid-19 and the consequent measures to contain the contagion, which have led to a Great Lockdown, will obviously have an impact this year on economic growth and world trade, which are expected to show largely negative variations. Italian exports of goods, in value terms, are expected to fall sharply in 2020, at the levels of four years ago, and are expected to close with a drop of 11.3%.
In a basic scenario of containment of the pandemic by the end of this year and the effectiveness of the economic policy measures adopted, it is however possible to foresee a robust recovery already in 2021 and a relatively sustained dynamic in the following years.
The expected evolution of Italian exports of services will also be reactive, following the expected collapse in 2020 (-29.5% in the first quarter of the year), mainly due to tourism, with a return to pre-crisis Covid levels as early as next year. The speed of the recovery of what was “lost“ this year from sales of goods abroad remains, however, differentiated according to business sectors and markets.
Italian exports: a heterogeneous picture by sector of activity
According to Sace's Export Report, greater downward pressure will affect some sectors of intermediate goods, such as metals and, to a lesser extent, rubber and plastic products, which have suffered the interruption of Global Value Chains (GCV) caused by the widespread blockage of production activities in the first half of the year, while the dynamics of chemicals will be less impacted in 2020 thanks in particular to the pharmaceutical component.
Criticism is also expected for consumer goods, particularly in the fashion sector, which will only slowly recover in 2021, while exports of furniture and furnishings will benefit from increased consumer attention linked to longer stays in the home, also as a result of smart working.
Investment goods, especially in transport, instrumental mechanics and electrical appliances, are also at a standstill. On the other hand, Italian exports of agriculture and food are the least affected in 2020, due to a production that did not suffer drastic stops during the lockdown and a demand sustained by the increase in spending on food and drink in the more or less organised distribution channels. In this sense, the physical restrictions imposed on direct contact with consumers and partner companies have made the importance and potential of digital channels and e-commerce for all categories of goods and services even more apparent.
Italian exports: its outlet markets
As every year, the Export Sace Report provides a precise map of geographical areas and sectors to allow Italian exporters to orient their choices. In 2020 Italian exports to the various geographical areas will see a minus sign everywhere: our sales to advanced European countries and North America will fall sharply this year, followed by a restart as early as 2021, although not enough to return to 2019 levels. The biggest recovery in our exports will occur in emerging European and CIS markets, while it will be slower in Asia, Latin America and Sub-Saharan Africa.
The export forecasts in two alternative scenarios
The high level of uncertainty regarding the evolution of the health emergency at a global level led Sace to simulate two alternative export forecast scenarios, based on different and worsening assumptions compared to those of the baseline scenario, depending on the duration of the Covid-19 emergency.
In a first scenario, Sace considered the possibility of a new lockdown on a global scale in the first months of 2021, while in a second scenario it assumed that the restrictions on economic activity and social distancing measures currently in place in many geographies are loosened more slowly and gradually than in the baseline scenario. In both scenarios, the need to reactivate or maintain restrictions on the movement of people and on both national and international production processes would accentuate the collapse of Italian exports, which in 2020 would be -12% and -21.2% in the two scenarios, respectively. 2021 would no longer be a year of “rebound“, but would see growth still negative in the first scenario and only slightly positive in the second, postponing the full recovery of pre-Covid values to 2023.