Growth stalls for Italian tiles

After five years of uninterrupted growth, the Italian ceramic tile industry experienced a downturn in 2018 with production, sales and exports all seeing falls of between 2% and 3%.

After five years of uninterrupted growth, the Italian ceramic tile industry experienced a downturn in 2018. The preliminary figures published by Confindustria Ceramica and Prometeia point to a 2.8% decline in production and total sales to 410 million sq.m (compared to 422 million sq.m in 2017), a 2.9% fall in exports from 338 million to 328 million sq.m and a 2% contraction in domestic sales to 82 million sq.m. To avoid accumulating excessive warehouse inventory, a number of companies decided to extend their traditional Christmas break by a couple of weeks.

The industry continued to invest in technology throughout 2018, driven in particular by the Industry 4.0 programme of tax incentives. The total value of investments is estimated at more than 400 million euros (covered by company cash flow), which although lower than the record 2017 figure continues to represent one of the highest levels of investments as a percentage of turnover of any Italian manufacturing sector. As Confindustria Ceramica chairman Giovanni Savorani pointed out, “this allows us to adopt the very best production equipment, particularly in the large ceramic slab segment where Italy is the world leader”.

Presenting the data for the fall in sales, Savorani confirmed that the fall in consumption in a number of different markets and export areas is having a negative impact on all the largest producer countries. In general, he said, “International trade in all sectors is being affected by the rise in trade tensions at a global level, particularly between the United States and China, and the consequent sense of uncertainty amongst consumers and professionals. The countries that are worst affected by the situation are those with a strong export activity and a high public debt, both of which are conditions that apply to Italy”.

But the slowdown in the Italian ceramic tile industry is also being driven by other factors. The most significant of these, explains Savorani, “is competition from countries that benefit from much lower labour and energy costs than those of Italy and at the same time have much better road and port infrastructure than our own”. Spain, currently the most formidable competitor, benefits for example from much lower labour costs as well as much less stringent environmental regulations.

Another factor is the growing competition from alternative materials, particularly vinyl or LVT (Luxury Vinyl Tiles). To deal with this threat, Confindustria Ceramica has teamed up with the corresponding Spanish and German trade associations to launch a new web and social media communication campaign aimed at promoting an awareness of the advantages of ceramic floor tiles.