The SVIMEZ estimate on the closure of ILVA: a disaster for Italy and the south

SVIMEZ has analyzed the impact that the closure of ILVA would have on our country and at noon. The study is distinguished by the different geographical areas using the econometric forecasting model. The evaluation exercise considers the direct, indirect, and induced effects.

The first concerns the production carried out and the employment that would be lost directly in the three plants being evaluated.

The second (indirect) effect evaluates the consequence, in terms of lower inputs and services purchased, which spread from the three plants in the remaining sectors, and from these to others. In the indirect effect, for example, the value (and employment) of the electricity produced in the region and / or elsewhere necessary to feed the steelworks is calculated.

The third, the induced one, concerns the reduction of consumption that derives from the lower levels of employment, direct and indirect.

The annual impact on national GDP is estimated, considering the direct, indirect and induced effects, in 3,5 billion, of which 2,6 billion is concentrated in the South (in Puglia) and the remaining 0,9 billion in the Center-North, equal to 0,2% of Italian GDP. If we consider the impact on the GDP of the South it rises to 0,7%.

A negative impact would occur above all on exports (-2,2 bn) but also on household consumption (-1,4 bn), considering the significant impact of the lack of salaries of plant employees, of the direct and the employment effects of the slowdown in 'economy. It should be remembered, in fact, that the employment committed by ILVA is almost 10 thousand employees (of which more than 80% in Taranto), about 3 thousand employees in the related sector and other 3 thousand employees linked to the economy activated by 'company. We are talking about an overall pool of over 15 thousand people that would risk losing their salary.

A further, more complete, exercise was carried out in order to assess not only the immediate effect of the closure with respect to the current situation which, as mentioned, is already far below the productive potential, but considering what Italy is losing from the not to complete the business plan that the company had undertaken to implement.

The business plan proposed by AM Investco envisaged bringing production from Taranto and the two sites in the North to eight million tons, equal to around 35% of national steel production. After the 2023, with the commissioning again of the blast furnace number five, the output realized in Taranto would have had to rise to eight million tons per year (to which would be added the two million realized in the North) and the quota on the national total would be destined to rise to over 40%. In the period of implementation of the business plan, the new company would also have made 2,4 billions. of new investments, in addition to around 1,1 billions. of expenses for the reclamation of the site object of the transaction with the previous property.

In the period of implementation of the business plan (2018-2023), the overall GDP triggered by production at the Taranto site and in the other two in the North would have been 22,5 billion. of euro over the entire period covered by the business plan. To have a term of comparison, it is in the complex of 1,3% of the Italian GDP, while in the South the impact rises to 4,2% of the GDP of the area.

In terms of employment, in the entire period of implementation of the business plan it is estimated that the total production achieved would have created around 51,000 job positions, of which about 42,000 in Puglia and the rest elsewhere (also in this case: most of it in the Center- North).

 

 

 

The SVIMEZ estimate on the closure of ILVA: a disaster for Italy and the south

| Economics, EVIDENCE 2 |