Manufacturing and investment in Italy

In the context of the post-industrial transformation of western economies over recent decades, Italy remains one of the countries that, at least relatively, still has an economy based on manufacturing. Despite a reduction of productive activities in recent years, and in particular during the period of austerity from 2011 to 2014, some indicators show the substantial continuity of the Italian economic model over time.

We see this in the case of investment in machinery, equipment and means of transport (MEMT), calculated by the Prometeia Association. In stressing the need for a recovery of investment, the analysts from Prometeia note that the contribution to MEMT in Italy is comparable from the manufacturing sector and the private services sector, 35 and 38 percent between 2008 and 2014. Other large European economies are more slanted towards services, like Germany (25-53%) and France (16-48%).

This index has not changes significantly for 20 years in Italy, while in the rest of Europe there has been a marked trend towards the increase of service investment. In addition, the rate of investment in the manufacturing sector remains higher than that in the service sector, except in some areas such as transportation and communications.

The chart below, prepared by Prometeia using OECD data, shows the division between MEMT investments in the large European economies.