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Epidemics

Italian Businesses Navigate Brexit Uncertainty

Strategic Insights

— 2 min read

Italian businesses were initially panicking about the impact of Brexit, but the UK trade deal brokered in December 2020 alleviated many concerns. However, the UK market has been battered by the coronavirus pandemic, and Italian exports to the UK are recovering more slowly than in other key markets. The Italian credit export agency, SACE, expects a 5.3 per cent growth in Italian exports to the UK in 2021, but recovery to pre-Covid levels is not expected until 2023.

Key Takeaways:

  • Italian exports to the UK dropped sharply during the pandemic, but are now recovering at a slower pace than in other key markets.
  • SACE expects growth of 5.3 per cent in Italian exports to the UK in 2021, but recovery to pre-Covid levels is not expected until 2023.
  • The UK was the sixth-largest market for "Made in Italy" products in the first seven months of 2021 and accounted for Italy's third-largest trade surplus after the US and Switzerland.
  • Typical Italian exports to Britain include machinery, cars and car parts, pharmaceuticals, clothing, furniture, food, wine, clothing, and fashion.
  • Brexit has introduced significant administrative burdens for Italian exporters, with paperwork and confusion about regulatory changes, including the UKCA product-safety mark.
  • There is broad optimism among Italian business leaders and policymakers that the UK will remain an important trading partner in future.
  • Food exporters, such as Pancrazio, a family business that exports tinned food to the UK, have fared reasonably well on the UK market, partly thanks to panic supermarket buying during the pandemic.
  • Sales of motor vehicles and machinery were the category worst affected by the Covid pandemic and are struggling to regain ground, according to SACE.
  • Companies, such as Coster Group, have invested in preparation for Brexit and plan to continue investing, despite delivery times and costs increasing.

Statistics:

  • Italian exports to the UK dropped by X% in 2020 compared to the previous year.
  • SACE expects growth of 5.3% in Italian exports to the UK in 2021.
  • Recovery to pre-Covid levels is not expected until 2023.
  • The UK was the sixth-largest market for "Made in Italy" products in the first seven months of 2021.
  • Italian exports to the UK accounted for Italy's third-largest trade surplus after the US and Switzerland.
  • Typical Italian exports to Britain peaked at over €25bn in 2019.

Sources:

  • Quoted source: Gabriella Migliore, Italian Trade Agency's Brexit helpdesk.
  • Quoted source: Annibale Pancrazio, CEO of Pancrazio.
  • Quoted source: Francesco Padovan, export manager for Coster Group.
  • Quoted source: Nicola Piovesana, export manager for Serena Wines.
  • Source: SACE, Italian credit export agency.
  • Source: IAI think-tank, Rome.

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