News to Know: Section in Recovery but Unpredictable Scenario

Although the figures for the G-S-J (gold, silver and jewelry) sector, which expects to close 2021 at +54.6% compared to 2020 (equal to plus €3.1 billion in value terms) and +11.9% compared to 2019 (equal to almost €940 million in terms of absolute value) are encouraging, it must be remembered that the latest study drawn up by Federorafi is based on surveys carried out before the outbreak of the Russian- Ukrainian conflict. This means that the consequences of the war did not appear among the options presented to the panel companies. However, let's take a look at the main criticalities that the study found: for almost 7 out of 10 companies, the increase in raw material prices is a serious threat. Furthermore, for 6 out of 10 companies, rising energy costs will have a significant negative impact on margins. For 58% of the sample, restrictions on international travel (for business and/or tourism) are also a major constraint. The absence of workers for reasons related to Covid worries 38% of the panel, while difficulties in finding raw materials and semi-finished products have - to date - a lesser impact, according to just 22% of respondents. Lastly, 1 in 10 companies were feeling the pinch of increased freight and transport costs. Looking more specifically at the companies’ opinions regarding economic developments in the first quarter, a significant 59% expect market conditions to remain stable compared to the latter part of 2021, 14% expect a further improvement and 27% of the panel fear that the sector's economic situation could worsen. The survey data confirm the indications that Federorafi President, Claudia Piaserico, anticipated in recent weeks, when she said: «The unpredictable developments of the Russian-Ukrainian conflict risk compromising the sector’s positive trend. The area affected by the war accounts for just under 1% of Italian jewelry exports but we have to consider that Russians buy a significant amount of jewelry when they travel abroad. The fear is clearly due to the economic and psychological consequences of the conflict on a global level, especially if it proves to be lengthy. Vicenzaoro is the first important moment of verification, as are the initiatives we are preparing on various markets, such as the innovative physical and online “Piazza Italia” platform, specifically for the US market, that we will soon be launching in New York in collaboration with ITA,» Piaserico concludes. Going back to the estimates in Federorafi's study, 53% of the companies involved in the survey expect turnover to grow in the first quarter of 2022 compared to the same period in 2021. 9% expect an increase of between 1% and 5%; 24% expect a growth of between 5% and 10%, marking a return to rhythms in line with “normal” market conditions after the post-Covid rebound; 13% expect increases of between 10% and 20% while 7% foresee a rise of between 20% and 50%. A more cautious 31% of the sample believe that sales will remain at the levels of January-March 2021, while 16% fear a drop in turnover compared to then. The average increase in the sample, clearly decelerating compared to 2021 rates, is estimated at around +7.3%.