MILAN — Cerved, a leading information provider in Italy and one of the main rating agencies in Europe, issued its Industry Forecast study on the impact of COVID-19 on Italian businesses and the economy.
It developed two scenarios: one based on the health emergency lasting until May, and a more pessimistic scenario that views the crisis stretching until December.
As per the basic scenario, two months will be necessary to return to normal, with impacts on the global economy and on exports.
According to the pessimistic forecast, six months will be necessary to return to normal, with complete isolation and closure of European Union countries.
In both cases, Cerved does not expect a financial crisis triggered by the contagion, while it views government interventions to support companies and families and public spending aids as necessary.
The agency took into consideration the complexities of Italy’s pipelines, the sectors that are strongly exposed to foreign countries in terms of supplies and exports, stating that the international dynamics weigh on these sectors as does the possible evolution of the virus, the risk of it worsening in other European countries and the U.S. For some sectors in manufacturing there is the “concrete possibility of a loss of positions compared to competitors at least in the short-term,” according to Cerved.
As per the basic scenario, Italian companies are expected to see revenues drop 220 billion euros in 2020 and 55 billion euros in 2021 compared with the situation before the COVID-19 spread. That would mean a 7.4 percent decline in 2020. Cerved expects a 9.6 percent recovery in 2021, or a 1.5 percent gain in 2021 compared with 2019.
Analyzing the pessimistic scenario, Italian companies would see revenues drop 470 billion euros in 2020 and 172 billion euros in 2021 compared with the situation before COVID-19. This would mean a 17.8 percent fall in 2020, a 17.5 percent recovery in 2021, representing a 3.3 percent decline compared with 2019.
As per the impact of coronavirus in the basic scenario, the fashion industry’s sales, which in 2019 totaled 91.7 million euros, are expected to be down 6.8 percent in 2020 compared with 2019, up 6.4 percent in 2021 compared with 2020 and down 0.7 percent in 2021 compared with 2019.
Among the 10 sectors most hit in this case, hotels are seen down 37.5 percent. Trade show organizers are down 25 percent in 2020 compared to 2.1 billion euros. E-commerce ranks first among the 10 industries faring better, posting a 26.3 percent increase in 2020 compared with 2019, totaling sales of 5.4 billion euros.
In the more pessimistic case, the fashion industry’s sales are expected to be down 13.9 percent in 2020 compared with 2019, up 10.4 in 2021 compared with 2020 and down 4.9 percent in 2021 compared with 2019. Hotels would be the worst hit, down 73.3 percent and trade show organizers do not appear in the chart. E-commerce would be up 55 percent to 6.7 billion euros in 2020.
The Lombardy region, which has been hit hard by the coronavirus spread and is Italy’s most important financial hub, is expected to lose 80 billion euros in the 2020 to 2021 period in the basic scenario, and 182 billion euros in the pessimistic one.