The year 2021 is playing witness to an increase in the value and volume of global trade, yet still hampered by the difficulty in sourcing raw materials and means of transport. Italy is in the wake of this growth, with a surge in exports especially in the mechanical sector, while textiles are still lagging behind.
According to data provided by trade credit insurer Euler Hermes in its Global Trade Report 2021, global trade markedly improved in terms of value (+8.6%) and volume (+3.4%) in the first quarter of 2021. The trend should continue to be positive until the end of 2021, states the report, with volumes surging by 7.7% compared to an 8.0% decline in 2020, and a 15.9% growth rate in terms of value compared to 9.9% in 2020. The forecast is also positive for 2022, when global trade is expected to rise by 6.2% in volume and 8.4% in value.
The reasons behind the worldwide economic rebound are not the same in all countries, according to Euler Hermes. The increase in trade value is propelled by three factors – raw materials, which account for 50% of the increase in trade flows; the increased costs of shipments due to the shortage of transport vessels (35%); and lastly the relationship between supply and demand (15%). The latter, this year, accounts for only 15% in consideration of the inventories managed by companies to respond to the rebound in local demand.
The global race for raw materials is supporting a large part of global trade volumes and is the primary cause of the price increases. European economies are particularly affected, whereas US and Asian countries seem to be benefiting from the situation.
Transport costs are growing in the shipping sector specifically, where there is a shortage of carriers and a considerable increase in the percentage of vessels not arriving on time (60%-65% in 2021, compared to 20% in 2019). According to Euler Hermes, the situation is unlikely to normalise in the short term.
In this global scenario, Italy is expected to record positive results. According to Euler Hermes’ estimates, Italian exports will shoot up by 12.5% in 2021 compared to the previous year, with an increase of €60bn, half of which will relate to goods intended for EU countries.
Germany is the main export market for Italian businesses, with €7bn of “additional exports” expected in 2021, followed by France and the US with expected increases of €6bn.
The sectors that will experience the biggest increase in exports are metalworking (€10bn), steel (€5bn), energy (€5bn) and agrifood (€4bn).
The positive forecasts for Italian exports are explained by the economic recovery in the main commercial partner countries. According to the Export Report from Italian insurer Sace, Italy is benefitting from the economic upturn in the US and Germany, but also in France, Belgium, Switzerland, Poland, China, Russia and Japan.
As far as industries are concerned, the mechanical-tooling industry and precision machinery are booming, as well as industrial supplies linked to the steel sector. Agrifood is also performing well, especially in terms of US exports.
However, the growth in exports is not the same in all markets. The automotive sector – in which Italy is the leading supplier in first-rate subcontracting – is slowing down. Textile manufacturing is still affected by the pandemic across Europe, with the major European brands struggling due to a drop in consumption recorded in the last two years.
The forecasts for 2022 confirm a growth in global trade for the textile sector of 6.2% in volume and 8.4% in value. In Italy, the expected increase in value is expected to be 6.3%.