Feature: Italy's boating industry optimistic after signs of recovery

After five years of sharp decline, clear signs of recovery in 2014 allows a cautious optimism to permeate Italy's marine industry.

"We surely are satisfied with the 2014 results, since they are the first positive signs after so many difficult years," Italian marine industry association UCINA's Study Department head Stefano Pagani Isnardi told Xinhua.

The industry's global turnover reached 2.5 billion euros (2.8 billion U.S. dollars) last year, with a 2.1 percent increase compared to 2013, according to data published by UCINA.

The leading shipbuilding sector increased by 1.9 percent on annual basis, and the boat accessories division showed the best performance with a 3.1 percent rise, while the number of people employed grew by 1 percent.

The data were released this week with a preliminary report of UCINA annual analysis "The boating figures", suggesting the industry has finally started rebounding.

According to UCINA, the positive trend was also confirmed by the nautical leasing, which showed a 15.4 percent increase in 2014 compared to the previous year.

"If we continue on this pace, we will clearly never return to the growth we had in 2007-2008," Pagani said.

"Yet, it is maybe better this way: that growth rate was unsustainable in the long term, although we have realized it just now".

Italy's marine industry was severely affected by the global economic crisis. The sector had witnessed a sustained growth rate since 2000, and its global turnover grew at 4.97 billion euros in 2005, registered a record 6.2 billion euros in 2007, and then flattened to 6.18 billion euros in 2008.

Within the following five years, however, the volume of business shrank by 59 percent to 2.49 billion euros, with domestic market dropped by 88 percent.

The magnitude of the crisis is easier to understand if considering the crucial impact the nautical sector has always had on the country's manufacturing, and in terms of gross domestic product (GDP) and jobs.

So far, Italy remains the world's first builder of mega-yachts over 24 meters, and it still ranks among the firsts worldwide for the value of production exported.

However, whereas the boating industry contributed to GDP for some 5.5 billion euros, or 3.6 percent, in 2007, its contribution decreased to only 1.8 billion euros, or 1.3 percent, in 2012.

The estimate number of direct employees also shrank to 19,000 from 35,000 between 2008 and 2012, and to 90,000 from 120,000 including the indirect jobs created by related activities.

Now, all hopes are for the moderate recovery to consolidate. According to UCINA estimates, the first quarter of 2015 would allow a further improvement, and the analyst seemed also confident in a longer perspective.

"We expect a more robust growth from 2016 on. Yet, this totally depends on what will happen on the domestic market, which remains crucial for full recovery," Pagani said.

In fact, a drastic change has taken place during the crisis: export accounted for some 53 percent of sales in 2008, but grew to 93 percent in 2013 and 2014.

The 2014 moderate growth was also due to a 2.7 percent rise in export, while the domestic market fell by 6.2 percent, according to the report.

"Exports has taken on a major role in the crisis by accommodating almost the entire Italian marine production, and we keep expecting positive results in the future, especially when the European market will recover fully," the analyst said.

Yet, unlike other sectors of the economy, the role of domestic demand could not be easily replaced."The weigh of the domestic market is easy to understand: in 2008, about 50 percent of our production was sold in Italy; now, we are at 7 percent."

Again, the expert would not expect to get back to the pre-crisis results, but thought it possible for the Italian market "to achieve a good growth in next years, possibly between 30 and 35 percent".

Pagani also stressed Europe, and Italy with it, plus North America remain the reference markets for the boating industry, since they have the strongest nautical culture, which no demand from emerging markets in Asia, South America, or Africa, can yet replace.

Some 40,000 Italian yachtsmen "went lost" between 2011 and 2013 only, according to the association.

"Restoring confidence among them, and bring back their desire to buy and change boats will be capital to us," Pagani said. (1 euro = 1.12 U.S. dollars) Endit