Technology puts wings on the Italian export

Published: 2008 - February/March, Business

Commercial trades between Italy and the United States resume their growth, with a higher than average increase for the high technological content export. In fact, importing of advanced products from Italy has posted an increase of 9.6% for the first ten months of the year. Well over the +7.3% posted overall by the Bel Paese exports, according to the US Census Bureau, the agency that gather the data of the American economy. 
The positive trend has been measured by both, the Italian institute for foreign trade (Ice) as well as, to a greater extent, by the US Census Bureau. The Italian agency in fact, estimates that the national export to the USA, for the period January-August 2007, have reached 16.3 billion Euro, posting a +0.4% compared to the previous year; import from the United States grows instead by 1.4%, or 7.3 billion. More considerable the figures of the increases gathered by the American agency:  during the first ten months of 2007, increase of American imports (for 29 billion US dollars) is a +7.3%, while export toward the Peninsula increases by 11.5%, reaching 11.6 billion US dollars.
In The US the Italian technology is appreciated more and more. The value of the technologic products sector comes close to 2 billion US dollars. Traditionally the main market is the aerospace industry: in this sector, orders for 725 million Dollars have been completed, with a truly “astronomic” acceleration of 27%.  Even the USA biotechnology sector rely more and more on the Italian excellences, purchasing technologies for 224 million US dollars, with an increase in turnover of 23%. Very important is also the biology connected sector of “life sciences”: Italian exports reach 235 million US dollars (+2.3%).  
But on which products are more concentrated the orders that the Italian companies receive from the US? According to the American statistical agency, the lion share, for the period between January and October 2007, has been detained by the mechanics:  in fact, Italian companies export totaled 5.8 billion US dollars (+8.10); with a market share of 2.8%. Followed by the fashion: wholesalers and American chains have imported from Italy articles and accessories worth 5.3 billion US dollars (+6.60%): a good 4.8% of the American market. Third item on the list are chemical products and Petroleum by-products, totaling 3.9 billion US dollars 1% pf the market).    The wine and food products sector, in which Italy is traditionally strong, soars to a level of 2.7 billion US dollars posting an increase exceeding 10%: the Bel Paese market share is 3.7%.
If up to here the results are positive, the furniture sector, with a 2.1 billion US dollars (-4.3%) turnover in the US, is suffering with a flat loss of 100 million compared with the same period of 2006. The director of the Ice New York office Aniello Musella explains: “During 2007 Italian exports like tiles, sanitary, ceramics and glass have fared rather badly, suffering from the decline of the construction sector.” The collapse of investments in the residential sector – continues the director of the Ice office in the Big Apple – is the major culprit for the deceleration of the American GDP.”
Italian export of the more traditional technological sectors, in which the competition from the Far East is stronger, is instead declining.  In fact, electronic imports from Italy (219 million) have collapsed, posting a decrease of 23%; decreasing are also the provisioning of hardware systems for IT and telecommunications (220 million or -2.9%) and flexible automation 164 million or -3.5%).  At any rate, the Bel Paese positioning at the sixteenth place, amongst exporters of technological systems, after Singapore, Thailand, Netherlands and Israel, is little gratifying.
The progressively decreasing trend of the weight of Italian export to USA seems to be slowing down: If in 2000 USA was the third largest trade partner, with an amount of trade of about 10 billion Euro, today the North American giant has slipped in fourth place, after Spain. Besides, American import has progressively favored goods coming form Asia, for their extremely low prices. Thus forcing   Italian companies to reposition their offer toward the higher priced segment. “A positioning which represents a good guarantee against crisis for the Made in Italy” – explains the diretcor of the Ice office in New York Aniello Musella. “Various analyses have pointed out that the purchase of high price segment products are less affected by the general economic trend”.
From the Ice-Prometeia report comes an additional positive signal for the Bel Paese: for the first time since 2003, the Italian share of the market in the world trade has resumed its growth, going from 3.3% of the first four-months period of 2006 to 3.6% for the same period in 2007, with an increase of 9% and a share of the market in the NAFTA Countries (Mexico, Canada and United Sates) stable at 2.1%. According to the US Census Bureau, in the US, the market share as of October 2007 was 1.9%. 
There are three “dark clouds” looming on the horizons though, which may generate troubles for the economic relations between Italy and the United States during the year: the effects of the subprime crisis; costs of raw materials, especially oil and above all the trend of the Euro-Dollar rate of exchange. In fact, amongst the Italian companies, especially among the manufacturing ones, fears are starting to spread about the negative impact that the strengthening of the European currency may have on foreign orders. The Euro-Dollar exchange rate at 1.50 makes less competitive – underlines the director of the Ice office in New York – the European exporting companies: an exchange rate sustained, even if not  openly,  by the American currency authorities, because it backs the rebalancing of the American commercial trade balance”.
But if Italy is struggling at a+2% of the GDP by the end of 2007 ((which should drop to +1.5% in 2008)) and the United Sates slowdown (USA growth will be closer to the two percentage points for three consecutive years),   the global economy will remain solid thanks to the decisive expansion of the emerging countries. In fact, according to the Ice-Prometeia report, 2007 has ended with a moderate slowdown of the world trade. A slowdown which should continue well in the first half of 2008; only in 2009 the resumptions should become generalized and trades may return to expand with rates closer to 7.5%. If next year the cake will really expand, Italian and American companies must be ready to conquer a bigger slice of that cake. Before this is booked by China.