The Italian agency for internationalization support and overseas business development (ICE), together with Federmacchine (a federation that represents some Italian trade associations), has released the results of a study on Italian machinery goods in terms of prominence and business opportunities in the NAFTA area – the free trade area between the US, Mexico and Canada.
TheAwareness study was carried out by Machines Italia to give an insight into the prominence and the amount of Italian machine tools in those countries. It was part of a project sponsored by ICE that aimed at promoting “Made in Italy” products and that surveyed 700 managers and heads of purchase departments of companies with a turnover of 500 thousand dollars or more. Crucial in the presentation of the report at Federmacchine headquarters were the actual or potential relationships with Canada and the US. Two countries that are similar not only culturally but also in the ability to increase their own GDP (Gross Domestic Product) and the main productivity standards after recent hard times. By focusing back on manufacture. The numbers speak for themselves. Between the second and the third quarter of last year the US GDP grew by 3.1% and by 1.3% between the first and the second quarter. In the period 2009-2011 the country’s productivity grew by 2.4% and is now 97% of what forecast in 2007, i.e. before the global crisis. Machine manufacturing account for 12 percentage points on GDP, but the rate is even more impressive in Canada –12.8% – where the productivity is 110% compared to that of about six years ago. If you take into consideration the macro-region ruled by the North American Free Trade Agreement you can easily realize that it has a scorching power. Exports in the NAFTA area represent 6.4% of the entire global trade. If you add the sales outside NAFTA the rate hits 12%. However, the most interesting data for the Italian machine tool builders is definitely the relaunch of manufacture, encouraged also by the so-called re-shoring, that brought back to the motherland operations that in the past years had been outsourced to countries with low-cost labor. The hunger for highly qualitative, reliable and flexible machineries is great overseas.
Exports potential is worth 150 billions
The study carried out by Machines Italia reveals that 27% of the interviewed people normally use machine tools made in Italy, and another 11% have used them in the past, thus researchers have estimated there is a total 38% hard core of users of Italian machineries. Also in the NAFTA countries Italy’s competitors are always the same. Competing with us on the level playing field there are Germany and Japan: their image is stronger than ours, and maybe that depends on a gap in communication that initiatives such as the one promoted by ICE are trying to bridge. But the distance is dramatically reduced if you take into consideration the pieces sold. In Obama’s motherland Italy ranks in fourth place in terms of supplies, behind not only its two usual competitors but also local manufacturers, of course. Yet, in the country of the Great Lakes things are different and Italy ranks in third place, ahead of Japan and Germany and behind Canada and the US. In order to grow further by 2015 and top the 150 billions that ICE sees as a possible goal it will be crucial for Italy to meet the demands of actual or potential clients. 45% of the first and 30% of the latter consider innovation very important and extremely important respectively. 42% and 22% make similar comments on the flexibility of machineries. 10% consider creativity extremely important, while it is very important for almost 35% of the interviewed subjects. Those are all distinctive traits of Italian machine tools that can also meet another significant requirement: produce high value added niche products, one of 2012 mid-term strategic goals for almost 70% of the people surveyed by the Awareness study.
The lean friendly peninsula
According to 80% of the interviewed sample, Italian products contribute to speed up industrial processes such as lean manufacturing, while according to a similar percentage they drive total quality management strategies in order to constantly improve products and processes. And they can also steer a market with a remarkable purchase budget. About 10% of alone the aficionados of the Italian systems plan to invest over 5 million dollars in machine tools over the the next two fiscal years; almost 25% plan a budget between 1 and 5 millions, while an overall 45% between 100 thousand and one million dollars; another 22% believe they will spend 100 thousand dollars or a little less. Also, about 60% of non -users of Italian machine tools plan to purchase items for up to 500 thousand dollars. The data showed by ICE and Machines Italia were matched by another study carried out by the North American specialized magazineIndustry Week on a sample of 342 subscribers in the US. It was made public at Federmacchine headquarters. The early balance-sheet aggregate turnover of the sector that Federmacchine represents was over 28 billions in 2012, 76% of it from exports. It is important to notice that only 10% of the answers referred to an extensive use of automation, while 37% of the interviewed people talked about a minimal use. On the other hand, 68% said they plan to increase automation by 10-24 percentage points in most cases (37%). The need for efficiency, quality and lower labor costs is not the only factor that inspires new strategies. 60% of the interviewed subjects believe the domestic output of their company is about to increase. And that re-shoring is an efficient policy that keeps key markets close (16%) and, moreover, meets the needs of the most expanding areas. 30% of the surveyed subjects said they are not necessarily loyal to their previous suppliers when it comes to renew their machinery fleet and 53% follow the opportunities of the moment. Also according to Industry Week Italy ranks in fourth position behind Japan, Germany and the US as far as the delivery of machinery and machine tools is concerned, but it is encouraging how the interviewed people see the Italian peninsula. 39% think it’s the home of high quality machinery also at reasonable prices (35%). The technological innovation of “Made in Italy” products earned an extra 33% positive comments, while services and the ability to adapt to industrial growth processes earned 24 and 25% respectively.