Statement by the President of Confindustria Lombardia, Alberto Ribolla

Milan, 10 February 2015 – The scenario emerging from the economic analysis for the fourth quarter of 2014 is complex and contradictory. We cannot, in fact, say that a recovery was secured during the year that has just ended.

Data from the final quarter confirm a flat trend for industrial production (-0.2%), but the overall annual increase of 1.5% compared to 2013 is a positive sign for Lombardy's industry. The excellence of our region is also confirmed by a comparison with the manufacturing production index of the Euro Area and Italy. Indeed, with a score of 96.7, Lombardy is in line with average European production levels (99.4) and well above the Italian index (80.1).

Data regarding orders are also encouraging, showing growth compared to the previous quarter on both the domestic (+0.6%) and foreign (+1.0%) fronts. These are encouraging, as rising order volumes provide hope for an increase in industrial production levels in the coming quarters.

However, data on orders for small and medium-sized enterprises compared to larger firms confirm that company size remains a problem, particularly regarding foreign markets across several parameters: orders, turnover, plant utilisation, and production. To compete, we need larger companies or SMEs aggregated into clusters; it is essential to create a two-way relationship between small, medium, and large enterprises.

The negative employment balance recorded in the fourth quarter (-1.1%) is the result of several factors. As highlighted by the analysis from Unioncamere, the Region, and Confindustria Lombardia, in collaboration with regional craft associations, this decline is primarily caused by a slowdown in hiring and a higher rate of departures due to the seasonality of employment. Furthermore, it is likely that companies put recruitment on hold while awaiting the implementing decrees of the Jobs Act.

Timid signs of recovery persist, as also confirmed at a national level by data from the Confindustria Study Centre, which indicates a 0.3% change in industrial production in January compared to the previous month.

We must not overlook the effects of certain national and international external factors: we all hope that the Jobs Act reform will reverse the employment trend, halting the loss of jobs and increasing the number of employed people. Additionally, the ECB's Quantitative Easing, according to the Confindustria Study Centre, could generate an increase in national GDP of around 1% between 2015 and 2016, with 3.2 billion in interest savings for businesses.

Returning to Lombardy, our region has what it takes to return to growth through its numerous areas of excellence, such as manufacturing, and by having understood earlier than other regions that competing in the global market requires aggregation and synergy. However, to achieve concrete objectives, a genuine medium-to-long-term strategy shared by all stakeholders is necessary, and we must focus on new aggregation tools such as clusters, which are key players in the European renaissance.

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