HIGH-END EXPORTS SEEN GROWING BY 20% TO 2022, WITH US IN LEAD

HIGH-END EXPORTS SEEN GROWING BY 20% TO 2022, WITH US IN LEAD

Italy’s export of high-end fashion, food, furniture products to 31 developed countries could rise 20% to €70 billion in 2022 led by the growth in the United States, according to a study by employers group Confindustria and the Prometeia think tank released yesterday.

The study looks only at what it calls “bello e ben fatto” ( BBF) products, referring to industrially-made goods with a high artisanal value added component in the sectors of food, clothing, furniture, footwear, jewelry, and eyewear.

While percentage growth is much higher in emerging markets, the “Exporting the Dolce Vita” study decided to focus on the US, France, Germany, the UK and other developed markets since they are much larger and are enjoying economic recovery.

The United States is the country with the most potential for Italian exporters, the study found, as well as the largest market for BBF. Exports to the US could grow from €10 billion in 2016 to an estimated €12.5 billion in 2022, based on unchanged business conditions.

The US is unlikely to make good on the protectionist threats made by the administration of President Donald Trump, according to the study. But if tariff levels were to return to the 1989 levels, Italy’s exports to the US would drop €1.4 billion in 2022 compared to the base scenario, according to its estimates.

Italian exporters are “just scratching the surface” in the US, said Minister for Economic Development Carlo Calenda commenting on the study.

That’s because the US is a challenging market for Italian companies, he said, because of its size and its domestic regulations.

For example, the states of New York and New Jersey alone import roughly the same value of BBF goods as the UK, the study pointed out, and California’s GDP is similar to that of France.

“The number of Italian exporters specializing in the US market is still quite small,” noted Alessandra Lanza, a partner at Prometeia. “If we reached the level of exports there that we have in other developed markets, we would increase our total by €7 billion.”

The market share in the US for Italian BBF products is 5.2%, nearly three percentage points less than the average for other advanced markets, the study said. Of over 200,000 Italian exporters, only 40,000 sell in the US.

Italy needs to find growth outside its borders to compensate for weak economic growth at home. Italian exports rose 1.1% in 2016, outstripping GDP growth which was 1%. The country has the same number of exporting companies as Germany and France, but the average value of exports per company is lower, according to the Italian Trade Agency. Italy’s exports currently total about 31% of GDP, compared to roughly the same as France and 32% for Spain. It is targeting an increase to 35%.

“We can still build on our market share in developed countries,” said Licia Mattioli, head of internationalization for Confindustria. “There are two ways to do this: increase the value-added component of our manufacturing base, and increase the number of companies that export.” 

Mattioli said many companies are simply too small to compete in foreign markets, particularly in the jewelry sector.

 

Source:italy24.ilsole24ore.com

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