District Monitor - Excerpt March 2009

District Monitor - Excerpt March 2009 District Monitor - Excerpt In the fourth quarter of 2008... In the second half of 2008, the performance of Italian industrial districts on the foreign markets was heavily impacted by the sharp deterioration in the global economic picture. In 4Q08, district exports contracted by 6.4% y/y. The three poorest-performing target markets in terms of Italian district exports in the final quarter of 2008 were the United Kingdom, the United States, and Spain. Furthermore, the closing months of last year brought a marked trend reversal in Eastern Europe, caused by the mounting hardships incurred in exporting to Russia and Ukraine. The situation is still very challenging also in Eastern Asia. Exports to France and Germany proved more resilient, especially for industrial engineering industry districts. On the other hand, exports to the Middle East and to the Rest of the World (driven by Algeria), kept growing at a brisk pace. ...one-fourth of the Italian industrial districts kept growing... In a difficult external economic context, one-fourth of the Italian districts covered by us achieved positive growth rates in the final quarter of last year. This share increases to around 40% when considering the industrial engineering and food industry districts. Once again, betting on quality, innovation, and production differentiation proved rewarding. ...in some cases at a fast pace All typical district productions recorded growth in some districts at least. These included important clusters such as the packaging machinery in Bologna and industrial engineering in Vicenza, textiles and clothing in Carpi and Treviso, leather and leatherwear in Florence, and preserves in Nocera Inferiore. The packaging machinery manufacturers of the Bologna district brought 2008 to a close showing 7.3% growth and setting new highs once again. In 4Q09, the district managed to overcome shrinking business on the Anglo-Saxon markets, in Russia, Spain, and Turkey, thanks to stronger exports to Germany and France (the two leading Intesa Sanpaolo – Servizio Studi e Ricerche 1 District Monitor - Excerpt March 2009 target markets), Japan, and to numerous new emerging markets (Poland, Iran, Czech Republic, Brazil, United Arab Emirates). Main industrial districts growing on the foreign markets (4Q2008 exports, y/y % chg.) Mantova engineering & metal products Sicilia Occidentale wine Carpi knitwear and clothing Bassano furniture Vicenza industrial engineering Empoli clothing Treviso textiles and clothing Nocera Inferiore preserves Schio-Thiene-Valdagno textiles and clothing Arzignano tanning Florentine leather pole Reggio Emilia & Modena agricultural machinery Montebelluna footwear Lamporecchio footwear Bologna packaging machinery Omegna household articles S.Mauro Pascoli footwear Langhe, Roero e Monferrato wine 0 5 10 15 20 25 30 Source: Intesa Sanpaolo elaborations on Istat data. France and Germany were the main drivers behind the growth in the Vicenza industrial engineering district’s exports. With the exception of a few markets (United States, Russia and China), district companies were able to adequately exploit the growth opportunities which emerged in numerous advanced economies (United Kingdom, Switzerland, Austria) or emerging markets (India, Poland, Saudi Arabia, Romania, Ukraine). In the leather production chain, the Florentine leather pole scored a recovery, consolidating its growth in Switzerland (logistics hub of an important group which operates in the district), and showing signs of an improvement in the trend of exports to France and Germany. The most brilliant performances were achieved by the Treviso textiles and clothing district, and the Carpi knitwear and clothing district. The former district’s exports surged on all its main target markets (Spain, Germany, Greece and France, in this order). The latter benefited from a strong increase in the worth of exports to Intesa Sanpaolo – Servizio Studi e Ricerche 2 District Monitor - Excerpt March 2009 Switzerland, home to the logistics hub of an important company based in Carpi. The Carpi district’s performance was also positive in France and Spain, where exports bounced back sharply in the closing months of last year. Nocera Inferiore preserves also achieved a brilliant performance, driven by growth on both traditional target markets (United Kingdom first among them) and more recently penetrated markets (such as Libya and Australia). In the closing quarter of 2008 the district benefited once again from the recovery in the list prices of tomato derivatives (fuelled by the progressive depletion of inventories and by the resulting rebalancing of demand and offer), as well as from higher volumes. More than ever before, a crucial success factor seems to be the ability to differentiate target markets, making the most of the opportunities offered by markets where demand trends are still favourable. Indeed, once again in the closing months of 2008, growth opportunities for Italian industrial districts emerged on a large number of target markets. Intesa Sanpaolo – Servizio Studi e Ricerche 3 .

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