Svimez, one in four workers in the South under 9 euros. The GDP recovers, but the industry remains behind and the precariousness is rampant

ROME – The South accompanied the country’s growth in the two-year period of the pandemic and will continue to do so this year too, but it is an uneven development, concentrated in some sectors, such as tourism and construction, while industry, research and development remain back, albeit with particularly advanced points. There is also a greater concentration of poor work, one employee out of 4 earns less than 9 euros an hour, an aspect that holds back consumption. Gaps that the Pnrr will not be able to completely fill: in particular, the lines of investment in kindergartens and schools continue to leave the South behind, and half of the investments at risk, indicated by Minister Raffaele Fitto’s third report on the Pnrr, concern the South. The director of Svimez Luca Bianchi explains it, in the presentation of the Annual Report, this morning to the Presidency of the Council.

GDP forecasts

After two years of strong growth in the South, between 2021 and 2022, Svimez estimates growth in the Italian GDP of +1.1% in 2023, with growth in the South (+0.9%) of only three tenths of percentage point less than in the Centre-North (+1.2%). And with full use of the resources of the Pnrr it could go even better, the GDP of the South could already show growth in 2023 of about 5 tenths (up to 1.4%) and about 4 tenths in the Centre-North.

Investments with high development potential are lacking

But growth in the South will continue to show strong imbalances, in particular investments in strategic production chains are lacking with a high innovation content, which can also effectively counteract the drain of skills. An example for all: the CdS, which finance large industrial investments in the South, and which appear to be a particularly attractive tool for businesses, according to updated data from Invitalia they have already financed projects for 4.5 billion in subsidies which have activated a total of 12.3 billion in investments. However, there would be a lack of 51.6 billion of investments that could potentially be activated to the extent that all the applications in the preliminary phase were admitted.

Lots of construction, little industry

The contribution to growth of industry in the strict sense stopped at around 10 points in the South against 25 in the Centre-North. Conversely, in the South the buildings contributed to growth seven points above what happened in the rest of the country. While the figure for growth in non-agricultural added value in the two-year period 2021-2022 was 100, services contributed 71 points in the South and 64 in the Centre-North.

The most advanced information and communication and professional services are the branch that has provided the greatest contribution throughout the country, but even more pronounced in the Centre-North.

And so the graduates keep running away

Scarce opportunities for investment and quality work therefore continue to drive brain drain. Between 2001 and 2021 around 460,000 graduates moved from the South to the Centre-North. Between 2001 and 2021, the share of southern emigrants with high skills (in possession of a degree or higher education qualification) more than tripled, from around 9 to over 34%.

Of the 460,000 graduates who moved from the South to the Centre-North between 2001 and 2021, an estimated 130,000 held a STEM degree. In 2021 alone, around 9,000 graduates who left the South (out of a total of 27,000) possessed STEM skills: a third of Southern investment in scientific and technological skills was “dispersed” in favor of production systems other than those established in the South.

5 million are underpaid in the Italy of poor work

by Rosaria Amato

July 16, 2023

One in 4 workers earns less than 9 euros an hour

Employment in the South has grown, and has recovered pre-Covid levels, but it is poorer and less paid work than in the rest of the country. Of the approximately 3 million workers under 9 euros in Italy, equal to 17.2% of total employees (excluding the Public Administration), surveyed by Istat, approximately 1 million live in the South (equal to 25.1 % of employed employees). In the South there is also a greater weight of fixed-term contracts.

The contribution of the Pnrr: insufficient in some areas

Overall, until 2027, the cumulative impact of the Pnrr on the Italian GDP could reach a value equal to 5.1 percentage points: 8.5 in the South and 4.1 in the Centre-North, estimates Svimez. And therefore it could even close the historical gap between the areas of the country. However, it won’t be because resources will not arrive in proportion to needs: for the 10.7 billion allocated to local administrations, explains Svimez, there is no correlation with the effective needs of the community. This occurs in particular for kindergartens and more generally for school buildings.

Moreover, it is not said that all investments will reach their goal, especially at this moment in which everything is under discussion: in the third Report on the Pnrr presented by Minister Fitto, recalls Svimez, the 83 interventions that present the greatest elements of weakness are highlighted and therefore the greater risk of failure with respect to the targets of the Pnrr. The total value of these 83 interventions amounts to 95.5 billion euros, of which approximately 45 billion euros refer to the so-called “southern share”.