Main Industries Shaping Italy’s Economic Development
14 Nov 2018 • by Natalie Aster
![](https://marketpublishers.com/lists/23951_en.png)
LONDON – Today, Italy is one of the leading industrialised nations from pole to pole. It boasts the 8th largest economy across the globe by nominal GDP – in 2017, the country’s GDP was estimated at about USD 1.9 trillion. Besides, Italy takes the 12th spot in the world in terms of GDP by purchasing power parity (PPP). The country emerged from recession in Q1 2015, however, Italy’s GDP hasn’t recovered and still remains 5% below the pre-crisis level. As of 2017, the Italian GDP added 1.6% and is anticipated to increase by 1.5% this year.
Last year, Italy was the 6th biggest exporter in the EU after Germany, the UK, the Netherlands, Belgium, and France. Meantime, Germany, France, and the US are the major export markets for Italian goods. The US is the major Italy’s non-EU export destination, accounting for nearly 9% of all Italy’s non-EU exports; last year the US imports from Italy totaled some USD 50 billion. Precision machinery was Italy’s leading export product category representing nearly 18% of the total country’s exports in 2017, it was followed by metals and metal products grabbing a 13% share. Italy also exports motor vehicles, clothing, footwear, pharmaceuticals, chemicals, food, and other goods.
Italy’s exports value over 2007-2017 (in billion USD)
Italy’s economy is driven majorly by the production of high-quality consumer goods manufactured by small and medium-sized enterprises (SMEs), many of which are family owned. SMEs produce around 68% of the country’s GDP. The countrsy’ SME sector has a larger chunk of firms employing fewer than 10 people that the EU average. These companies provide almost half of total employment in Italy.
Here is a look at some of the key industrial sectors in Italy:
- MANUFACTURING SECTOR
The north of Italy is the indusrtrialised part of the country with a vast network of private companies. The northwest region of the country is recognised as the “Industrial Triangle” linking Genoa, Turin, and Milan; it is home to various modern industries focused on machinery, naval, aerospace, and some other fields. The central and northeast regions of Italy are represented by small businesses of low technology and high craftsmanship: Nogara, for instance, is renowned for the production of wooden furniture, whilst Sassuolo is known for producing ceramic tiles. There are also many companies specialising in jewelry, textiles, appliances, footwear, clothing, machine tools, and other categories. Besides, Italy has also many food & beverage, and chemical manufacturing units spread across the country.
Automotive Industry
Today, Italy is one of the dominating automobile producers both at the EU and global scales. The country ranks the fourth major automaker in Europe after Germany, the UK, and France. The establishment of the Fiat Company in the year 1899 in Turin encouraged the robust development of the automotive industry in the country. However, the national automotive industry was decentralized after the emergence of other automotive brands in Milan, Naples, Brescia, and some other cities. Still, Fiat Group accounts for the bulk share of the Italian automotive market. Currently, foreign brands hold a 71% share of the country’s auto market.
The number of newly registered passenger vehicles sold in Italy in 2017 added 8% YoY and reached 1.97 million. Meantime, the new light commercial vehicles exhibited a modest decline (-3.6%) last year, totaling around 193,178 units. Diesel vehicles account for nearly 56.4% of all new vehicles produced in the country, gasoline vehicles grab a 31.9% share, and vehicles using alternative fuel represent 11.7% of the overall number.
Presently, Italy’s automotive industry is majorly concentrated in Turin and the Piedmont region: almost 50% of the total number of companies engaged in the country’s automotive industry, comprising manufacturers of auto components, are established there.
Steel Industry
Italy is the 7th leading exporter of steel across the globe. In 2017, the country’s steel exports totaled some 13 million metric tons – a 1% YoY increase from 12.8 million metric tons exported in 2016. Italy grabs a share of appr. 4% in the world’s overall steel exports. It supplies steel to over 170 countries with 14 of them accounting for almost 80% of the overall Italian steel exports. In value terms, steel accounts for only 6% of the total amount of goods exported from Italy. The steel industry contributes about 2% to the Italian GDP.
Italy: crude steel production volume during 2009-2017 (in million metric tons)
- TOURISM
With more than 52 million tourists coming every year, Italy is the 5th most visited country in terms of international tourism arrivals. It attracts numerous tourists by its rich culture and history, unique cuisine, art, fashion, beautiful nature, and priceless ancient monuments. Moreover, Italy boasts the highest number of world heritage sites globally: 51 places in the country are listed by UNESCO as having special cultural and physical significance. The most visited cities in Italy include Rome, Pisa, Trento, Florence, Milan, Venice, Naples, and Turin. This year, the annual spend of international visitors in Italy is set to amount to EUR 41.1 billion.
The tourism industry accounts for nearly 13% of the Italian GDP. This year, the total contribution of the tourism sector to GDP in Italy is estimated at around EUR 227.3 billion. By 2028, the industry’s total contribution to GDP is likely to reach 14.8%.
Total contribution of tourism industry to GDP in Italy during 2014-2017 (in billion EUR and in %)
The tourism sector makes a substantial contribution to employment in the country. In 2018, the sector directly provided around 1.51 million jobs, whilst direct + indirect contribution to employment reached about 3.44 million jobs – equivalent to almost 15% of the country’s employment.
- AGRICULTURE
Italy is one of the major agricultural players in the EU. The country ranks the largest European producer of fruits, wine, vegetables, and rice. Presently, the agricultural industry contributes appr. 2.1% to the Italian GDP. However, Italy’s agricultural production is strongly dependent on the imported feedstock due to the limited availability of natural resources in the country.
Italy holds the first spot on the list of the world’s largest wine producers. The winemaking is widespread throughout the country. Wine is one of Italy’s top export commodities. Some of the most popular Italian winesare Tuscan Chianti, Barbaresco, Piedmontese Barolo, and Frascati. In 2017, Italy produced around 42,500 hectoliters of wine.
Italy: wine production volume during 2011-2017 (in thousand hectoliters)
The northern part of the country produces primarily grains, sugar beets, soybeans, rice, dairy products, and meat. Moreover, northern Italy has a strong tradition of cattle and pig breeding. Meanwhile, the southern part specialises in the production of wheat, olive oil, citrus fruits, and vegetables. Grain fields account for the biggest share (nearly 31%) of the total land area in agricultural use in Italy, followed by olive trees plantations with a share of appr. 8.2%, vineyards – 5.4%, and citrus orchards – 3.8%. Nearly 26% of the country’s agricultural land is dedicated to pastures and around 11.6% to feed grains. The annual output of the fishing sector (from both aquaculture and capturing), including molluscs and crustaceans, is about 480 thousand tons.
However, as in many Western European countries, the agricultural industry in Italy is experiencing a continued decline; this is majorly attributed to the country’s scarcity of natural resources.
© MarketPublishers.com, 2018
Analytics & News
![](https://marketpublishers.com/assets/i/cards/digest_bg.png)