The current picture of the Italian manufacturing industry shows a downsized production capacity, but overall less vulnerable than a few years ago and started along an internationalisation path different from the one characterising the first decade of the 2000s.
Although the focus on savings in the food market remains high, new consumption patterns and demographic drivers are redefining the relevance between and within expenditure sectors. More fruit and vegetables, less meat; and in general, greater demand for services and usage versatility.
In 2015, the banking sector finally reversed the trend and returned to profit, taking a first step towards the gradual improvement in results that is expected to continue in the coming years. In 2018, the return on capital will attain 5%, a positive figure if compared with the past few years.
The weakness of investments represents a distinctive feature of the recent European macroeconomic climate. They dropped significantly following the global financial crisis, falling by more than 15% between 2007 and 2013, and showing signs of slow recovery, that has contributed to curbing the pace of the economic recovery and that may affect potential growth and competitiveness.
During the years of the crisis, a number of European Member States intervened with the creation of a bad bank or other measures in support of national banking systems. In Italy, aid to the sector has been extremely marginal but important reforms were implemented recently. The effective management of bad assets will be essential for increasing the market valuation of Italian banks, reducing funding costs and capital needs.
The banks have been very active over the last three years in selling managed savings products, and this has enabled them to recuperate profits from services in a period of extremely weak interest margins. The situation regarding commissions, however, has reached an inevitable turning point.
In the 1995-2014 period, Italian households experienced two different phases: one of moderate growth and the other characterised by a steep fall in their economic well-being. The first ended with the financial crisis in 2007-2008, the second continued until 2012-2013. 2014 showed a reduction in the slow-down. Generally speaking however, household disposable income in 2014, in real terms, was 8.4% lower than in 1995; if corrected by household composition, the 2014 income is instead at the same level as 1995.
The Italian government has reaffirmed its decision to slow down the process of deficit reduction planned a year ago so as not to counteract the economic recovery. The safeguard clause has been revoked and the aim of balancing the budget has been postponed, but achieving this objective in 2017 will in any case require a restrictive manoeuvre compared to the previous year.
The most recent data on the behaviour of Italian households illustrate a context of all-important changes in the attitude towards savings as compared to the recent past. We could speak in terms of "new normal" financial behaviour of households: the effects of the financial and economic crisis and the changes of the banking system may have generated "structural" changes in the attitudes of households towards finance.
The data from the last few years show that demand from pension and insurance agencies for professional management services is worth over 25 billion euro per annum, with additional opportunities related to reconversion of the liquid and directly managed components of portfolios.