Italy - Transport and Logistics: Infrastructure investment to drive growth (Strategy, Performance and Risk Analysis)
With a GDP of over US$1.9tn in 2017, Italy is the fourth-largest economy in Europe. It has a diversified financial system, known for its high-end products. Manufacturing is well developed, with motor vehicles, machinery, chemicals, pharmaceuticals, fashion and clothing all key industries. According to the World Economic Forum’s Global Competitiveness Index 2017-2018, Italy scored high on the parameters of health, education, business sophistication, and market size. However, the country’s high tax burden and lack of financing options pose challenges to growth.
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Decline in freight affecting road transport GVA
Total GVA generated from road transportation registered a CAGR of -3.9%, falling from US$46.4bn in 2012 to US$37.9bn in 2017. A decline in national and international transport, coupled with a decrease in trade activities, drove the trend. Road transportation GVA is anticipated to post a CAGR of -6.3%, from US$34.9bn in 2018 to US$26.9bn in 2022 due to a decrease in road freight.
Network growth to drive rail freight
Italy’s rail freight recorded a CAGR of -0.8%, falling from 20.2 billion tonne km in 2012 to 19.5 billion tonne km in 2017. A decline in the length of teh country's operational rail network led to a decrease in freight traffic. Network length posted a CAGR of -0.4%, falling from 17,060.0km in 2012 to 16,737.9km in 2017. However, due to investments in network improvements and cross-border rail projects, rail freight traffic is anticipated to post a CAGR of 1.5%, to rise from 19.6 billion tonne km in 2018 to 20.8 billion tonne km in 2022.
GVA from warehousing and storage to decline
GVA for warehousing and storage recorded a CAGR of -3.9%, falling from US$34.4bn in 2012 to US$28.2bn in 2017. A decline in transport services caused by a lack of productivity in various sectors affected GVA. In addition, a lack of investment in the building of new facilities deterred growth. Over the forecast period, GVA from warehousing and storage will post a CAGR of -6.7%, falling from US$25.7bn in 2018 to US$19.4bn in 2022. The segment accounted for 35% of total transport and logistics GVA in 2017, a share anticipated to fall to 31% in 2022.