Italian manufacturing faces economic pressure from geopolitical tensions and rising costs

Italian manufacturing sectors are facing significant economic headwinds due to geopolitical tensions, rising energy costs, and shifting global markets. The fashion industry has seen a 10% decline in turnover over the last three years, with total revenue dropping from over 100 billion euros to approximately 92-93 billion euros. Carlo Capasa, president of the Camera Nazionale della Moda Italiana, attributed this contraction to global conflicts, US-China tensions, and a slowdown in the Chinese market.

Other sectors are experiencing similar pressures. The footwear industry reported a 2.4% decline in exports during the first five months of the year, although its trade balance grew by 9.6% to 2.16 billion euros. In the textile district of Prato, businesses are struggling with a sharp rise in energy costs; gas prices increased by approximately 130% and electricity by 86% over a seven-month period, placing heavy burdens on small subcontractors.

In the food and beverage sector, exports grew by only 0.5% in the first half of 2026, following a much stronger 2025. While European markets showed growth, exports to the United States fell by 10.8%. Additionally, German automotive exports have declined by 4%, while imports from China have surged by 120.9%, marking a shift in regional trade dynamics.