Analysts shift recover in Italy and Europe to 2015
Verona (Italy), 17 september 2013 – Data collected by CECE indicate that sales in Europe in the first four months of the year posted a significant drop in all Mediterranean countries (Portugal, Spain, Italy and Greece), while the situation was slightly better in the rest of the continent. The outlook for the rest of the year is positive, although the resumption of sales in summer is unlikely to offset the downturn in the closing months of 2012 and the first months of this year. Even Euroconstruct has downgraded its forecasts for 2013, with an estimated drop of 3% in 2013 (previously 2.5%) and expectations for growth in 2014 of just 0.5% which in 2015 could rise to 1.7%. The situation in Italy, however, still suffers from major difficulties: the building recession seems not to have bottomed out and it is only towards the middle of next year that an albeit modest turnaround is expected. There is considerable expectation to see what the "Del Fare" decree recently launched by the Government will actually achieve, and companies – at least those in the residential construction field – are hoping that confirmation of tax incentives for renovation will ensure breathing space for the market. At least in the short term, the go-ahead for public works is unlikely: here, less stringent budgetary constraints at EU level are encouraging certain timid signs of hope. According to the study conducted by Unacea and Prometeia – The Building Market – based on Istat data as of 31 May, 2013 will see a downturn of 4.1% compared to 2012, while 2014 will probably post a further of 1.8%. It is only in 2015 that the trend is expected to improve, although the recovery will be limited.
The trend for construction machinery exports should be followed with close attention: after a stable start of 2013, a quite worrying decline set in at the end of the first four months. The overall drop is 8% (worth 744 million euros in total), with road, earthmoving and concrete machinery suffering badly, while some growth was seen for tower cranes, drilling machines and machinery for preparing aggregates. Certain geographical areas, such as Germany, Turkey, Scandinavia and Russia, are the only exceptions. A market that confirms its status as a very important outlet for Italian construction machinery that can be estimated in the first quarter of 2013 at 8% of total and worth about 19 million euros. Concrete machinery, inert preparation machinery and tower cranes are in demand in Russia.
Despite a significant decline, Western Europe is still the first market for Italian exports. It is followed by Asia, North America, Latin America, Africa and Oceania.
Despite the difficulties that approaching new markets involves, exports remain the only way of salvation for Italian companies in the sector. Obviously, on emerging markets, competition has to be met from increasingly aggressive foreign companies capable year after year of offering more competitive products not only in terms of price but also as regards quality. Yet if we take a closer look at the opportunities on some of these markets, it is clear that today's market lies there. India and Gulf countries, as well as Africa and South America with Brazil in the lead, are vital geographical areas and Veronafiere has launched important initiatives in these countries – starting with the MS Africa & Middle East event scheduled next December. India, according to a recent report by Simest and AssoCamereEstero, recently saw Central Government and the Federal States confirm investments worth about 500 billion euros – with 400 billions in the construction industry alone. The plan envisages hospitals, as well as residential buildings for 300 thousand apartments, 18 thousand km of roads, airports and railways. Another interesting incentive involves tax concessions and exemptions for investors, in addition to other benefits, such as reduced customs duties for machinery intended for works financed by the World Investment Bank. Building and construction alone represent 27% of Indian industrial production. Markets are equally effervescent in the Middle East, particularly in countries belonging to the Gulf Cooperation Council.
It would be impossible here to provide a complete list of projects announced in these countries: mention can be made that the United Arab Emirates have unveiled plans worth about 35.7 billion dollars; Abu Dhabi has also announced investments of 18 billion dollars over the next 5 years, especially in the infrastructure sector; Dubai, on the other hand, is focusing on major property investments, such as "Blue Waters" (1.6 billion dollars) and "Palm Mall" (900 millions). Saudi Arabia has scheduled completion of the first part of the KAFD (King Abdullah Financial District) by the end of the year, while the Arriyadh Development Authority (ADA) announced the selection of architects and their projects for the stations for the new Riyadh Metro. The Housing Ministry has just awarded contracts for the construction of as many as 7000 apartments with subsidised prices in an area north-east of the airport. South America does not only mean Brazil and works for the coming World Cup and Olympics. For example, the Colombian Government has just allocated 109 million dollars to upgrade three railway lines, 370 million dollars for the construction of roads and the adaptation of the runway of San Luis de Ipiales Airport. As for Africa, US President Obama recently assured 7 billion dollars to boost electricity generation in sub-Saharan Africa, especially in Ethiopia, Kenya, Liberia, Nigeria, Tanzania, Uganda and Mozambique: this plan should ensure an increase in supplies by as much as 10,000 Megawatts.