Italian SMEs: performance, transition and risks

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The impact of the pandemic

The diversified intensity of the COVID-19 impact proves the deep heterogeneity of the Italian productive fabric and the different exposure of the local economies. On a whole, the most impacted macroarea has been the Centre, penalised by the specialisation in heavily restricted sectors such as tourism, foodservice, hôtellerie. On the contrary, Northern regions had severe losses in manufacturing and services, while the Southern area in transport and food distribution.

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In 2020, the estimated number of SMEs operating in the Italian production system was 153.627, a figure in decline compared to almost 160 thousand in 2019.

In 2021, the estimates on the accounts of small and medium enterprises showed the first signs of recovery, certified by the overall stability of the financial indicators. Southern Italy is where the best performance is observed compared to pre-Covid levels (+8.4% compared to 2019), followed by the North-East (+7.3%) while the Centre continues to remain below the levels of 2019 (-4.6%). The massive doses of liquidity injected into the system, together with low interest rates, have contributed to the stability of SMEs, triggering a high increase in financial debts which however doesn’t seem to be compromising.

The new political scenario

The geopolitical, commercial and economic tensions following the Russian-Ukrainian conflict have severely impacted the imports and exports of the most war-exposed sectors as wheat, fertilisers, clothing, and even home furniture.

Cerved Group, one of the principal commercial information agencies, has created a pair of forecast models based on two different scenarios: base and worst. In the first case, the possibility of an escalation of the war conflict is ruled out, leading to a more flexible trade of raw materials starting in 2023.

In the second view, the tensions will intensify the destabilisation of the political framework, together with an increment of the sanctions and the interruption of gas flows from Russia. Both scenarios would increase the number of risky small and medium enterprises, from a percentage of 11,4% to a steady 12,6% in the first case and peaking at 13,2% in the second, with the Centre of Italy in the lead.

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The riskiness of green transition

The European Central Bank has recently proposed guidelines to monitor climate and environmental risks, defining two principal exposures: the physical one, concerning extreme meteorological events’ damages amplified by climate change, and the peril of transition, linked to the costs of the adjustment process in line with the climate neutrality objective.

Another Cerved study reported that, only considering the risk of landslides and floods, already 16 thousands SMEs result in a “high” or “very high” risk. At the national level, the number of climate-endangered workers in small enterprises is around 565 thousand, meaning 13,3% of the total.

On the issue of transition, data show that SMEs exposed to this risk are little more than 16 thousand, employing 478 thousand workers and reporting an exposure to the credit system of over 44 billion. A detailed analysis has assessed that almost two thirds of them don’t have an adequate financial structure to deal with potential conversion investments, and the ones having room for expenditure are so dispersed that conglomeration would prove inefficient and, in any case, lacking regional integration and synergy.

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