The figure from the International Monetary Fund speaks for itself: Almost 102% increase in energy costs in 2021 and in April a further increase of 55.5% was measured. In practice, energy inflation is anything but stagnant ”. To say it is Stefano Fantacone, Scientific Director CER (Centro Europa Ricerche)who participated last July 1 in the Congress of Assodimi and Unacea Associated Charterers.
In front of an audience of professionals working in the construction and large machinery sector, Fantacone has sketched a picture of the current situation, which sees two opposing forces coexist: a real economic cycle still robust on the one hand and oneinflation pushes on the other.
How will it go? To better outline the perspectives, let’s start with a specific question about the ERC:
International economic situation (published on 6 July 2022)
- Quarterly GDP trend: India + 4.1%, Russia + 3.3%, Brazil + 1.7%
- Industrial production falls in Germany (-2.7%), increases in Italy (+ 3.7%)
- Inflation at 8.6% in the euro area and in the United States
- Political interest rates: Russia -150bps, Brazil + 50bps, India + 50bps
- Business and consumer confidence in the euro area and the United States fell
Italian Economy (published July 1, 2022)
- Industrial production is on the rise
- Inflation rises again: + 6.8%
- Youth unemployment falls below 24%
- Business and household confidence fell
- BTP ten-year interest rate exceeds 4% and then falls back
“Economic scenario in continuous development dominated by one factor above all: the disorder in the commodity market. The most important data is in fact the one concerning the development of the raw material market and in particular energy ”. have explained Fantacone who also added figures to explain how the conflict in Ukraine entered and accelerated it an inflation process already underway.
“Before the conflict in Ukraine Petroleum he cited increases of 20%, now the quota for increases of 40%.
That gas European natural gas, whose prices appeared to stabilize at an increase of 5%, is now rising by 105%.
That coalif it rose by about 40%, it rises today by more than 125%.
Therefore, On an already existing inflationary trend, the conflict in Ukraine is creating further uncertainty and price tensions. This is the theme that dominates the macroeconomic scenario with net growth rates for inflation ”.
Fantacone therefore recalls that it is precisely this great uncertainty and concern that determines a reorientation, even quite quickly, of monetary policy with maneuvers on interest rate rise.
“The scenario that lies ahead, even though it is a peak, is that it does not fall completely. The cost of energy will remain at least double what we were used to at least throughout 2022 and a good part of 2023 ”.
How does all this affect the forecasts?
“Before this situation (the conflict in Ukraine and the possibility of a return of energy inflation) we expected an increase of arrow by 4.3% in 2022. The increase we expect today is 2.6%.
But the real cycle shows extraordinary signs of resistance to this energy inflation. The government was able to confirm its growth forecasts of 3.1% and may be right because the figures for the first part of the year were better than feared.
We need to start having some concerns around 2023: it is likely that these tensions will be triggered in 2023, and therefore our 2.2% growth forecast will be disregarded and growth will fall below 2% ”.
Hence great concern, great uncertainty, but also an unexpected solidity in the real economic cycle. “We remember that even a growth of 1.5% would be positive, especially if one compares with the pre-pandemic growth of 0, …%”.
Construction machinery: prospects for the end of the year
For CER Scientific Director, the prospects for construction machinery in this context are still good.
One reason is PNRRif the government crisis allows it. “Compared to the pre-pandemic forecasts, we could have almost 20 billion a year more than public investmenti.e. a variable with a high multiplier: a wave that raises GDP and describes the probability of one long cycle of positivity of buildings. There is uncertainty about our own superbonus and the global uncertainty about prices, but the outlook remains positive ”.
Also in this case, Fantacone has given some numbers.
2021, for construction machinery, was an extraordinary year: + 30% increase in sales, over 25 thousand units sold machinery, almost 5 thousand units more than the previous year, 2020, which was a pandemic year, but not of contraction for the sector.
“For this year, we expect an increase of 11.3% in sales of over 28 thousand units (estimate made in March). So 2022 should also prove to be a positive year.
In 2023 we will see! It may be that we are content with this long growth cycle in the sector ”.