Italy’s machine tool industry experienced an 8.5% rise in orders in the first quarter of 2025, compared to the previous quarter of October to December 2024, according to Ucimu-Sistemi per Produrre, the association of Italian machine tool manufacturers. The index reached a value of 84.5 (with 2021 as the base year).
The growth was largely driven by a significant recovery in the domestic market, where orders surged by 71.5% compared to the same period in 2024, reaching an index value of 94.5. However, international orders saw a decline, dropping by 18.2% compared to the first quarter of last year, with an index value of 74.4.
Ucimu president Riccardo Rosa welcomed the positive trend, stating, “2025 has started with an increase in orders, which is encouraging after a challenging 2024. It shows an improvement in the short- to medium-term outlook. However, concerns remain, especially in the international market.”
Domestic Growth Driven by New Policies
This marked the third consecutive quarter of positive domestic order intake. Rosa emphasized that the increase in orders was particularly notable, bringing the index closer to the strong levels seen in 2021, a highly successful year for the industry. The positive effects of Italy’s Transition 5.0 policy, which aims to support digital and green upgrades to industrial systems, became apparent as companies clarified the technicalities of the measure and followed through on their purchase intentions.
“The demand for new production systems remains strong in Italy, driven by the need to upgrade industrial plants in both digital and environmentally friendly ways,” said Rosa. The trend was evident as companies preparing for the Lamiera exhibition in Milan, set for May 6-9, reported completely sold-out spaces.
However, Rosa pointed out that only 11% of the allocated 6.3 billion euros for the Transition 5.0 measure had been used so far, indicating that the program may not be as user-friendly for businesses as the previous Industry 4.0 initiative. “When a policy is easy to use, the market responds quickly, as seen with Industry 4.0,” he noted.
Need for Clarity on Future Measures
Rosa also stressed the importance of clarity on the Industry 4.0 tax credit. Since January, companies have been waiting for guidance on how to apply for this credit. “If we had clear instructions on available funds, domestic demand could pick up even more in the coming quarter,” he said. However, he warned that the effect may be short-lived if companies do not have sufficient time to meet production deadlines.
He called for a new measure that could reallocate unspent funds from previous programs to support future initiatives under the 4.0 and 5.0 models. This would help ensure continuity and growth in Italy’s industrial sector in the coming years.
Challenges on the International Front
Despite strong domestic performance, international markets present significant challenges. Rosa noted the impact of global geopolitical tensions, including ongoing conflicts and economic instability in Europe. He also highlighted the uncertainty surrounding US foreign trade policy, particularly the shifting positions of President Donald Trump on tariffs.
“The return of Trump to the political stage, coupled with the unpredictable nature of his tariff policies, has added a level of uncertainty not seen in recent history,” Rosa said. “This situation requires companies to take proactive steps to navigate the changing global landscape.”
Fostering International Expansion
In response to these challenges, Rosa emphasized the importance of diversifying export markets. The United States remains Italy’s top export destination, followed by Germany, China, France, and Turkey. He encouraged businesses to explore emerging markets like India, Mexico, and South America, where there is significant potential for growth.
Ucimu has been supporting Italian businesses in these markets through initiatives such as Oficina Italiana de Promoción in Mexico, Desk India with a support office in Mumbai, and Desk China in Beijing. The association is also helping companies access markets in India and Vietnam through ITC and IMT Networks, and planning exploratory missions to the Balkans.
Rosa concluded, “Our goal is to assist our member companies in expanding into high-potential areas. We are committed to facilitating their entry into these markets and ensuring their continued success.”
