Italian Machine Tool Orders Drop, Foreign Markets Hold Steady: Insights and Outlook

In the final quarter of 2023, the machine tool orders index, compiled by UCIMU-SISTEMI PER PRODURRE’s Economic Studies Department & Business Culture Centre, experienced a significant decline of 31.1% compared to the same period in 2022. This index, measured against a base year of 2015, reached 92.1.

The decline was primarily driven by a reduction in domestic market orders, while foreign sales remained resilient. Orders from overseas markets saw a modest decline of 2.9%, with an index value of 100.9. In contrast, domestic orders plummeted by 69.1%, with an index value of 79.4.

Annually, the index recorded a decrease of 24.7% compared to the 2022 average, with a domestic index drop of 48.4% and a foreign index decline of 11.3%.

Barbara Colombo, president of UCIMU-SISTEMI PER PRODURRE, highlighted the challenges faced by Italian manufacturers in the domestic market due to reduced order intake. She noted a general stability in foreign markets but emphasized the importance of clarity regarding new incentive measures expected in 2024.

Colombo discussed the impact of government and parliamentary discussions on potential new incentives, which led companies to delay purchasing decisions. She compared this to the rush to invest in the previous year to take advantage of tax credits before they were reduced.

Looking ahead, Colombo anticipated a cautious approach to new machinery purchases in the first months of the year, with increased activity expected in the second quarter. Despite the challenges, she noted a positive trend in applications to exhibit at the BI-MU exhibition.

On the foreign front, Colombo noted stable order intake, particularly in North America, which has compensated for weaker demand in Asia and Europe. She expressed hope for increased demand from Europe and Germany, highlighting the potential benefits of re-shoring for Italian manufacturers.

Colombo emphasized the need for long-term structural fiscal tools to enable companies to plan investments effectively. She also discussed a proposal for cooperation between Italian and German manufacturers to strengthen industry partnerships and explore new markets.

Original source machinesitalia.org