46% of Italian companies have felt the effects of the war

– “Our industry is in danger and with it is the future of the country”: this is the alarm raised by Federmeccanica with the 179th edition of its economic survey on the Italian metalworking and mechatronics industry, relating to the second quarter of 2026.

The document reads: “In the second quarter of 2026, persistent geopolitical tensions and the volatility of energy costs continued to weigh on the activity of manufacturing companies. In our country, industrial production remains fragile and signs of recovery are still discontinuous: the more vigorous tone at the beginning of the quarter was then scaled down until the slowdown in June”. And again: “The weakness of our industry clearly emerges from the latest data: in the second quarter of the current year, production increased slightly, both in economic terms (+0.4%) and in trend terms (+0.5%)”.

The impact of the conflict in the Middle East on businesses

Federmeccanica’s monitoring of the conflict in the Middle East and the intensity of its impact on company activity continued also in the second quarter. 45% of the companies interviewed consider the impact of the war moderate and 9% none; on the contrary46% consider the effects of the conflict to be significant. Among these, 34% predict a significant long-lasting impact, while 12% predict a short-term impact.

In the previous survey, companies had indicated the increase in energy, transport, logistics and insurance costs as the main consequence of the conflict. The current survey therefore looked into whether, and to what extent, these increases have been passed on to sales prices: 21% of companies did not detect significant increases in costs, while 6% declared that they had not yet been able to pass on the higher costs to prices.

The transfer of increases to sales prices was negligible in 29% of cases (up to 10% of the increase), reduced in 19% (10%-40%) and partial in 18% (40%-80%). The remaining 7% of companies declared that they had almost entirely passed on, over 80% of the increase in production costs, to sales prices.

Orders, liquidity and employment declining

The survey, conducted among a sample of associated companies, shows expectations of a worsening of the sector’s situation, with forecasts for the coming months indicating a decline in production activity and a reduction in employment. The share of companies that declared an increase in outstanding portfolio amounts fell to 26% (from 32% in the last survey) orders. The percentage of companies that evaluate the company liquidity situation as “bad or very bad” remains high, at 11%. 20% (lower than the previous 24%) expect production increases, compared to 27% (up from the previous 21%) who instead expect contractions.

The share of companies that are not thinking of changing their workforce is confirmed to be above 70% (13% predict increases, compared to 14% who predict downsizing). 23% of the companies interviewed have activated procedures for crisis and/or corporate restructuring: 12% have already made use of social safety nets, in 3% of cases an activation is expected in the next three months and the remaining 8% declared they are in the evaluation phase.

The comparison with the European Union

In the European Union, after the decline recorded in the first three months of 2026, in the second quarter there was a reversal in the trend of production activity, both in the manufacturing sector (+1.3% cyclical) and in the metalworking sector (+1.6%), despite the slowdown recorded in June. There Germania showed a slight recovery (+0.3% on a cyclical basis), while the Spain marked a more marked recovery (+3.3%); France and Italy confirmed the modest positive results of the first quarter, equal to +0.4% and +0.5% respectively.

In the first half of 2026, Italian metalworking exports increased on average by 8.3% compared to 2025, supported above all by non-EU markets (+9.9%) compared to those of the European Union (+6.9%). Imports grew even more (+11.9%) and the trade balance thus stood at around 23 billion euros, below the 25 billion recorded in the first half of 2025. Towards the EU, between January and June, metalworking exports increased towards France (+11.0%), Germany (+5.2%) and Spain (+3.5%). Among non-EU markets, exports to Switzerland continue to grow significantly (+118.7%, thanks exclusively to sales of precious metals); those towards the USA (+4.2%), the United Kingdom (+2.0%) and Turkey (+1.7%) also grew. However, those directed towards the Asian markets of China (-4.1%), India (-10.2%) and Japan (-3.0%) decreased.

Businesses, layoffs and work

In the period January-June 2026 the hours of Redundancy Fund overall authorized for employees of metalworking companies decreased by 22.1% compared to the same period in 2025. Cigs requests, however, exceeded those of Cigo, 73.1 million and 50.7 million hours respectively. The growth of the CIGS is mainly attributable to the increase in hours authorized for company reorganizations and crises (+62.6%), compared to the decline in those allocated to solidarity contracts (-33.7%).

Within the aggregate, the production results over the period were contrasting in the different sectors, and this is because the metalworking sector is highly heterogeneous, both due to the inclusion of a vast range of production activities and the different sizes that characterize the companies. The sector’s resilience was supported above all by the manufacturing of motor vehicles and trailers (+3.2% cyclical and +13.4% trend) and other means of transport (+2.1% and +4.9% respectively). Bucking the trend, the production of electrical equipment decreased by 1.7% compared to the first quarter and by 0.9% compared to the second quarter of 2025.

Federmeccanica’s appeal

“Our industry is in danger and with it the future of the country. The signals from our investigation become many clues that provide proof and even something more. It could already be a sentence”, declared the vice-president of Federmeccanica with responsibility for the Research Office, Alessia Miottoon the occasion of the dissemination of the survey.

“Our appeal – he continued – is addressed to the government of Europe and our country. We must join forces to protect the industry in general and metalworking/mechatronics in particular. Wars produce devastating effects, the crisis in other countries connected to us is reflected in our supply chains, the complexities of the transition continue to weigh on strategic sectors. There are some lights that come from sectors such as shipbuilding, but there is the risk that we then navigate in a submerged manufacturing world with huge critical issues. We can’t afford it.”