The Importance Of Exports And International Freight To The Italian EconomyThe Importance Of Exports And International Freight To The Italian Economy

Italy has been building its export business steadily since the second world war and export has become especially important to the Italian economy recently, as the country has been pinning its hopes on an export led recovery from the global recession.

The most important exports from Italy are industrial products,cars and car parts, shoes, clothing and textiles, as well as food and wine, for which Italy has worldwide renown. Meanwhile, imports to Italy include fuels, meat, grain products and raw materials. Furniture is another important export, building on the country's reputation for great design. Following the devaluation of the lira in September 1992, Italy experienced an export boom and Italy has registered a positive trade surplus ever since then. As a consequence of the rising importance of Italian export, many shipping companies have developed to service the buoyant market and arrange international freight and freight services to Italy's markets.

Other EU countries and the United States are the most important customers for Italian exports. In fact, Italy carries out nearly 60% of its trade with other countries in Europe. Germany is the single most important customer, closely followed by France, then the United States and the United Kingdom. Spain, Belgium, the Netherlands, China and Japan also account for a significant stream of export sales and a large number of freight forwarders service these various markets. Freight services companies ensure that trade between Italy and the rest of the word is efficient and streamlined, so that trade can flourish and the Italian economy derives maximum benefit from its overseas trade.

In particular, in recent years, Italy has seen strong growth in international freight to non-European countries such as China, Turkey and India. This reflects Italy's growing strategic focus on emerging economies. Indeed, in March 2010, the Italy-China Foundation said that Italian exports to China were the only ones to have grown during the recession because of the Chinese middle class's rising demand for products with the cachet of having been made in Italy. In response, therefore, freight companies have focussed on offering new freight services between Italy and emerging markets.

Most freight services are related to manufactured products. Italy has very mountainous terrain, making cultivation difficult, and this is a major reason why Italy's economy is so dependent on manufacturing - especially of cars and machinery. Italy operates in the premium sector of many sectors, with world famous brands such as Armani, Prada, Alfa Romeo and Maserati leaders in their respective fields.

As well as its many famous brands in fashion and auto mobiles, Italy also has a number of well known export brands in other sectors. For example, Candy and Indesit are well known in home appliances. Ferrero, Barilla Group, Martini & Rossi, Parmalat and Campari are well known in food processing. Some freight transport operators specialise in providing for the specialist needs of these freight forwarding sectors.

The strengths of its many premium brands helped Italy withstand the effects of the global recession. However, its exports volumes still suffered as a result of the slowdown in worldwide demand and exports volume declined from 550 billion dollars in 2008 to 370 billion dollars in 2009, according to the CIA World Factbook. Notwithstanding such a huge decline, Italy has still performed well compared with other countries and in 2009, Italy was still the 8th in the world in terms of its volume of exports. This has kept the freight transport sector in Italy reasonably buoyant throughout the global recession.

Export has thus been the star in the Italian economy, with hopes firmly pinned on an export-led recovery from the global recession. It is therefore a matter of some concern to those operating in freight forwarding in Italy as well as others that September 2010 has seen the first decline in business confidence for eighteen months, according to the ISAE Institute. This research centre, which is based in Rome, says that manufacturing confidence has dropped for the first time since March 2009.

This is worrying for the Italian economy as hopes had been pinned on exports. In contrast, the domestic market for goods is flat, due to low consumer confidence, partly fuelled by the government's recent austerity measures.

The current outlook for production for export and thus international freight has declined, according to the report, and this is seen to be related to the recent drop in the value of the Euro against the US dollar.

This makes Italian exports more expensive and is expected to be a barrier to their continued growth, putting the brakes on continued economic growth, with a resultamt impact on levels of international freight.

The slump in business morale in Italy will inevitably have an impact on every shipping company and freight company operating in the Italian market. However, ultimately, it can reasonably be expected that the underlying strengths in the Italian economy will prevail and the Italian economy will continue to be a world leader in export.
by Stephen Willis
References and Bibliography
Stephen Willis is Managing Director of RW Freight Services a UK based freight transport company, established in 1971 and operating worldwide freight forwarding services including specialist freight services to and from Italy
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