Eyewear: Growing uneasiness and doubts about the future

Pieve di Cadore, 15 December 2022 – The ANFAO [Italian Optical Goods Manufacturers’ Association] general meeting was held on 14th December 2022 at the Eyewear Museum of Pieve di Cadore to take stock of eyewear industry performance and review the forecast for the coming months in Italy and internationally.

CONTEXT

With the gradual waning of the Covid-19 pandemic and loosening of restrictions, expectations around the globe tended to be more positive, but the reality that emerged at the beginning of 2022 is turning out to be much more problematic, so much so that some analysts are calling the current situation the “new era of chaos”. This context is heavily impacted by increasingly rapid change, political and media polarization, supply chain issues, inflation, debt and geopolitical conflicts.

The three prevailing aspects affecting the current scenario are: the war in Ukraine, which impacts the economic sector due to ongoing interruptions in the supply chain; a change in consumer confidence that will modify spending habits and force businesses to adopt new forecasting models to cope with market uncertainty; the sharp spike in cost of living and rising inflation looming over every country in the world. In the United States alone, inflation has nearly quadrupled in the last two years and, in the UK, has reached a 40-year high. According to the International Monetary Fund, global inflation is expected to peak at 9.5% this year before slowing to 4.1% by 2024. Lastly, the new era of anxiety: from climate concerns to political stressors, anxiety is influencing consumer mindsets and behaviors in a recession market.

“All of this requires that we be extremely prudent and think long-term,” remarked Giovanni Vitaloni. “Our sector is performing well. It is on the upswing and we expect to close out the year with on the “plus” side. And yet, the rise in prices we are experiencing will soon limit family purchasing power and the increased cost of raw materials, the energy crisis, galloping inflation and the unstable geopolitical situation call for extreme caution and keeping a close eye on future forecasts. The increase in cost of utilities and operating expenses, without the benefit of support measures, could put ongoing operations of many industry companies at risk in the coming months, particularly the SMEs, that are less prepared to absorb new increases in raw materials prices, shipping, logistics, packaging, etc. We will have to roll up our sleeves in order to not leave anyone behind on the road to progress. To fuel this spirit, collaboration and cooperation are required, which certainly are not lacking in the eyewear industry, along with a major intervention plan from our government.”

THE DATA

EXPORTS

For the first 8 months of 2022, Italy’s eyewear industry enjoyed a strong showing, especially in terms of exports, which absorb about 90% of the sector’s overall production. ANFAO data for the January-August period indicate a 22.4% increase over the same period in 2021 and an overall value of 3.231 bn€.

Looking at the month-by-month performance of exports in the first 8 months of 2022, the trend follows that of previous years with constant growth and a key spike in March, that significantly outpaced industry performance from 2019 to date.

Exports by geographic area are all recovering, compared to 2021. The most significant figure are the results in value achieved over the same period in 2021 by Europe (50.8%), America (35%) and Asia (12.6%).

Analysis of individual countries reveals that the data on exports to the Americas can be almost entirely attributed to the United States, while the top European performers were France, Germany, and Spain.

 2022 FORECAST

For year-end 2022, ANFAO forecasts overall growth in exports of 12-14% and an 8-10% increase in production compared to the previous year. Instead, the domestic market remains stable compared to 2021 (growth forecast between +0.5% and +1%) and jobs (between -1% and +1%).

Source: www.anfao.it