Market Monitor Machines Italy 2017

Market Monitor

  • Italy
  • Machines/Engineering

31st October 2017

Profit margins of machinery businesses rebounded in 2016 and are expected to improve further, but competition remains strong in the domestic market.

  • Competition remains strong in the domestic market
  • Payment duration is 100 days on average
  • Insolvencies are expected to decrease again in 2017


2017 Italy machines overview


The Italian machines/engineering sector has proved to be relatively resilient during the downturn of Italy´s economic performance after 2008, due to its export orientation, high specialisation and added value products in precision mechanics. Value added growth of the industry increased above 3% in 2016, and is expected to rise further in 2017 and 2018, by about 1.5% annually.

As in previous years, competition remains strong in the domestic market, especially among small and medium-sized machinery companies dependent on construction businesses. While domestic capital investment growth has picked up again since 2016, the construction and road machinery segment performance is still hampered by the slow construction rebound in Italy. The earthmoving machinery segment is highly dependent on public works and therefore exposed to structurally slow payments by public entities. At the same time, demand for machinery related to the oil and gas sector remains subdued.


2017 Italy Machines performance


In contrast, the machinery segment dependent on the manufacturing sector continues to benefit from export growth and increased domestic market demand (especially from the automotive and food sectors). Larger and more diversified machinery companies and export-oriented SMEs are expected to improve performance and cash generation. Overall, profit margins of Italian machinery businesses rebounded in 2016 and are expected to improve further in 2017. 

Payment duration in the Italian machinery sector is 100 days on average. Payment experience has been good over the past two years, and the level of protracted payments is low. Non-payment notifications have been stable over the last 12 months, and are expected to remain low in the coming months. The number of insolvencies in the machinery sector is relatively low. Machinery insolvencies are expected to decrease further in 2017, by about 5%.


2017 Italy machines SW


Our underwriting approach remains generally open, especially for larger businesses and niche export-focused subsectors (e.g. high precision mechanical works). Those businesses usually show solid financials and a good liquidity profile. However, we are still more cautious about companies operating in still difficult end-sectors (e.g. construction) and which are dependent on public entities. We closely monitor machinery businesses which produce components for the oil and gas sector, as investments in this industry have deteriorated over the past two years due to lower energy prices.

Related Documents


The statements made herein are provided solely for general informational purposes and should not be relied upon for any purpose. Please refer to the actual policy or the relevant product or services agreement for the governing terms. Nothing herein should be construed to create any right, obligation, advice or responsibility on the part of Atradius, including any obligation to conduct due diligence of buyers or on your behalf. If Atradius does conduct due diligence on any buyer it is for its own underwriting purposes and not for the benefit of the insured or any other person. Additionally, in no event shall Atradius and its related, affiliated and subsidiary companies be liable for any direct, indirect, special, incidental, or consequential damages arising out of the use of the statements made information herein.