A strong growth in Norwegian exports of traditional goods to Italy was registered in the first months of 2014 (January-April 2014). Compared to the same period in 2013, the growth was of + 27%, representing a total value of 1.95 billion NOK. This is much higher than the average export growth to the rest of Europe (+ 7.3%).
A strong increase is registered in particular for raw materials, engineering products, non-ferrous metals, amongst others. The table below shows further details and numbers.
A natural explanation to the growth is a weaker NOK compared to the Euro. This has led to cheaper Norwegian products and to a strong increase in export volumes.
However, this is the case also in the other EU countries and cannot explain the boost in exports towards Italy. Could this be an early sign that things are starting to improve in the Italian economy?
The world’s 9th biggest economy (2012, World bank) has always been poor when it comes to energy and natural resources such as raw materials. Italy has therefore been forced to build their economic strength on other pillars. The country has built a strong industry concentrated on transforming imported raw materials into finished processed goods of high quality, primarily for export. This is how Italy has become the 8th largest exporter in the world (2011, WTO) and has the 8th highest industrial production (2013, Confindustria / Global Insight and the Population Reference Bureau)
With the exception of seafood and finished goods which are directed to the consumer market, most Norwegian exports regards commodities and raw materials directed to Italy’s industrial production. The amount of Norwegian exports to the country is thus highly dependent on the development of the Italian industry.
In other words, the sharp increase in Norwegian exports, seems to be an indicator of the fact that the wheels are about to get going again in the Italian industry again.
A slight increase of 0.3 % (ISTAT) in industrial production in Q1 2014 driven by several sectors showing a positive development (metallurgy and manufactory of metal products: +7.4%; production of transport equipment: + 7%; manufacture of articles of rubber and plastic: +4%), in combination with more positive consumers’ and industry’s expectations as well as increased investments in Italian companies by the Norwegian Government Pension Fund Abroad (+24 % in 2013), are all signs of a change in the country’s economic trend that can hopefully lead to positive spirals.
|Product category||% increase in export||Best performing subcategories|
|Fish||27.2 %||Salmon: 44.3 %|
|Raw materials||35.1 %||Skin and leather: 81.7 %|
|Chemicals||15 %||Pharmaceutical products and medicines: 92.8 %|
|Semi-finished/processed products||2.6 %|
|Non-ferrous metals||35.4 %|
|Engineering products||43.2 %||Equipment: 123.4 %;Electrical machinery: 37.6 %|
|Finished processed goods||6.9 %||Scientific instruments: 14.1 %|