«The recipe for relaunch? More funds to invest and the reduction of interest rates”

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«As a chemical entrepreneur, a sector that generally anticipates trends, I had already seen a prospective decline in demand. The slowdown is not unexpected, now it’s a matter of finding a way to restart.” Francesco Buzzella, president of Confindustria Lombardia (now also of Federchimica), reads the current situation in chiaroscuro. Which indeed sees manufacturing slowing down on average, with a limited slowdown and which occurs in the presence of substantial stability on the employment side. «I don’t see any disastrous falls – he explains – but the framework certainly doesn’t help, first of all with planning: investments are stuck. At this level of rates and with this situation of uncertainty, those who can postpone.” To reverse the trend, Buzzella hopes for a return of rates to more reasonable levels, down from the current average of 5.35% for businesses, triple compared to a year ago. «With inflation mainly imported due to the high cost of raw materials, the ECB’s choices are difficult to understand: slowing down demand does not have great effects. Now a reduction in rates is hypothesized, starting from the first quarter of 2024. Returning to a level of 3-3.5% would already be a good thing.” Another boost to growth can come from the partial renegotiation of the Italian PNRR objectives, diverting part of the funds at risk to investment support. «The aim is to have 5-6 billion euros available to serve the digital and green transition, confirming the tax credit method, which is quicker to use for businesses than hyper-depreciation».

Change of pace in the rules also requested from the EU, to enable companies to better face the double digital and green transition. «Paths that require decades – he clarifies – but above all a pragmatic approach, without imposing universal and ideological choices but finding a way to deal with changes gradually. From this point of view, the next European elections and the composition of the new Commission will be critical steps.” «Another ballast – he adds – continues to be energy, because even at these more reasonable levels compared to last year we are still at 2.5 times the pre-crisis values ​​and above all well above what our US and Asian competitors paid. Competitive gap to our disadvantage which risks widening considering the German plan to set a ceiling on electricity for companies in the order of 70 euros per MWh: how can we compete if in our country it costs almost double?”.

In any case, the rush of company price lists is over for Buzzella, in light of less “tight” raw materials and more fluid supply chains. Minor push on prices also linked to the drop in demand, exacerbated in this phase by destocking phenomena.

«The opposite of what happened last year, now companies looking at the market are committed to reducing inventories, choices which in turn have a depressive effect on orders. Even if the picture is complex, I don’t see a vertical fall on the horizon, there is a clear slowdown also linked to the slowdown in Germany but not a collapse. The stability of employment confirms this feeling. And moreover, if there is a problem in companies today it is certainly not in the redundancies but rather in the difficulty of finding the required skills on the market”.



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