ITALIAN EYEWEAR FIGURES FOR THE FIRST HALF OF 2024

EXPORT TRENDS TO THE U.S. A SOURCE OF CONCERN

MI ilano, September 24, 2024 - ANFAO releases figures on performance of the eyewear sector in the first half of 2024.

Italian eyewear ended 2023 on a positive note, driven by exports, despite the fact that overall world goods trade fell back sharply (-1.9%).

In the first part of 2024, many of the factors that contributed to this slowdown were still present: poor demand for manufacturing goods and investment, high interest rates, persistent energy prices well above pre-pandemic rates, conflicts, geopolitical tensions and fragmentation. In addition, the German recession worsened in Europe.

Against this backdrop, exports in the eyewear sector, which account for a large portion of its production, after a first quarter marked by renewed growth (+2.3% in value compared to 2023), also suffered a slight setback (-2.9% in the second quarter of 2024).

Consequently, overall, Italian eyewear exports decreased slightly in value by 0.3% to about 2 billion 888 million euros in the period January-June 2024.

In detail, compared to the first half of 2023, exports of frames fell by 0.4% (838.4 million euros) and sunglasses by 0.6% (1,986 million euros); although insignificant (about 63 million euros), exports of lenses increased (+9%).

FIRST HALF-YEAR 2024: EXPORTS BY GEOGRAPHICAL AREA

FIRST HALF-YEAR 2024: EXPORTS BY COUNTRY

Based on the figures available to the association, in the first half of 2024, the performance of the optical market (frames, sunglasses, and ophthalmic lenses) increased by about 5% in value compared to the same period in 2023.
In terms of overall volume, however, there were drops (about -2% for sunglasses and frames, -1% for ophthalmic lenses).
The increase in value was therefore generated by a higher value-added product mix, with higher average prices: the mid- to high-end product for sunglasses and frames and progressive lenses on the ophthalmic side.

The International Monetary Fund's growth forecasts are not particularly rosy for 2024 and 2025, especially for advanced economies, the United States and the Eurozone above all.
Considering that these are major eyewear markets, the decline in exports seen in the second quarter of 2024 is a warning sign to be monitored.
The war in Ukraine, the Middle East conflict, the growing fragmentation of the economy, the anti-inflationary monetary squeeze, the withdrawal of government aid and extreme weather events are a chain of causes that have contributed to a geopolitical picture of extreme uncertainty.

These are certainly not the best conditions for trade growth.
The eyewear industry will therefore face a complex situation to interpret in the second half of 2024.

Estimates prepared by ANFAO, given current conditions, point to an end of 2024 very close to 2023 values.

 

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As planned at the beginning of her term, Lorraine Berton, now ANFAO President, also became president of the subsidiary IES Srl, the service company which successfully manages a number of activities, including the international eyewear event MIDO | Milano Eyewear Show.

Last July, pending the appearance of a valid candidate as ANFAO President, the Association renewed the outgoing bodies of the Srl with an interim Board of Directors to ensure management continuity. The Board of Directors chaired by Giovanni Vitaloni, ANFAO's Past President, thus took office in the prospect of a subsequent changeover with ANFAO’s future political leaders, in the manner and at the time deemed most suitable and propitious. Once the MIDO 2024 edition had been successfully concluded and all the association's activities were under way, the time was right for President Berton to take over. Thanks to the close cooperation and joint efforts of Lorraine Berton and Giovanni Vitaloni, the procedure for defining the governance was completed, ensuring a smooth transition and strategic continuity in managing the initiatives of the entire ANFAO system. "I would like to thank Giovanni Vitaloni for his work over these years, during which I have had the pleasure of collaborating and working actively with him at the helm of ANFAO and IES Srl. The dedication and commitment shown by everybody have proved a crucial contribution to the success of MIDO and ANFAO’s activities. The projects launched during his term of office will be a stimulus to further improve and replicate his success in the years to come," said President Berton.

"I am confident that under Lorraine Berton's leadership," remarked Vitaloni, "IES will continue to achieve new goals and promote our industry's excellence. I would like to thank all those who have worked with me over the past 10 years, facing challenges that were not easy and contributing to the many successes achieved. I wish the new team well in their activities, with the primary objective of working for the good of the companies in our industry”.

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ANFAO INTRODUCES CSE "CERTIFIED SUSTAINABLE EYEWEAR"
LAUNCH OF THE FIRST INTERNATIONAL SUSTAINABILITY CERTIFICATION

CSE, "Certified Sustainable Eyewear," the first product sustainability certification program for the eyewear industry, was presented during MIDO, the most international eyewear show.

Created, registered, and promoted by ANFAO, the Italian Association of Optical Goods Manufacturers, in collaboration with CERTOTTICA, this certificate is destined to become the new product sustainability standard for the eyewear industry, certifying glasses and their components: frame fronts, temples, lenses, small metal and plastic parts.

After a preliminary study, which ANFAO, Studio Fieschi and CERTOTTICA collaborated on with members of the Association's Technical Committee, the program was pilot tested on 5 eyewear companies, different in type and size, after which the project was approved.The certification identifies the most sustainable products, it is voluntary and based on UNI EN ISO 14020 and UNI EN ISO 14024 standards. It is open to all eyewear companies, both Italian and international, who will apply for the program starting today.

The CSE label, issued by the independent body, CERTOTTICA, will be issued by ANFAO based on a number of industry-specific assessment criteria that take into account the entire life cycle of the product (resource extraction, raw materials, production, distribution, use and disposal). The assessment will take into consideration environmental, social, economic, and technological factors, and these criteria will be updated on a regular basis, according to technological advances and market requirements.

"Today we present a very important project for the eyewear industry, which emphasizes the commitment of our members and is aimed at improving the environmental impact of the supply chain. After almost two years of studies and research, with our Association and CERTOTTICA at the forefront, I want to highlight how important it is to understand and support this project from the onset because itmeets one of the biggest challenges we are all facing:sustainability,” Lorraine Berton, President of ANFAO, states. “With the CSE certification we will be able to guide eyewear companies, primarily SMEs, into the future of sustainability, along a path that is oriented toward environmental, social and economic issues."

With CSE, it will be possible to stay a step ahead of the European and international policies on environmental sustainability of products, to monitor production processes and suppliers and to participate actively in the industry's change of course toward sustainability by emphasizing their “sustainable” products through a program acknowledged by the eyewear industry around the world.

"Much work has been done on CSE and this is a big step forward for the whole eyewear supply chain, ”Michele Gasparini, ANFAO vice-president, in charge of sustainability and ESG issues, explains. “It is a challenging undertaking for companies and distribution, retail, and optical centers. They must be informed, trained, and aware of the importance of CSE to convey the message to their final users, who are increasingly aware and sensitive when it comes to sustainability.This is why we presented CSE at MIDO, and in the near future we will implement communication activities aimed at promoting knowledge and awareness of the CSE brand."

For any further information about CSE, Certified Sustainable Eyewear, please visit our new website: 

www.cse-eyewear.com

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2023 at two speeds for the eyewear industry: after THE first six months at double-digits, figures for the second SEMESTER were back to normal.

PRELIMINARY RESULTS 2023: PRODUCTION +8.4%, EXPORTS +7.6%

THE GLOBAL BACKDROP IN 2023

After the marked rebound in GDP of 2021-2022, post lockdown, and a return to economic normality, the three global drivers-the United States, the European Union, and China- began to slow down, affecting the global scenario overall.

In 2023, the global economic scenario weakened, in Europe due to the negative impact of continuing high inflation and monetary tightening, in the emerging markets due to the dynamics of the Chinese economy, which is struggling more than expected.

Global manufacturing suffered a substantial setback. A number of factors contributed: the shift in consumption from goods to services, the weakening of European industry, and tougher conditions for demand, especially for investment, due to the tightening of credit and the gradual elimination of emergency policies.

This was reflected in a decline in world trade in goods, held back in particular by high geo-economic uncertainty, a strong dollar and multiplication of trade barriers.

In short, the post-Covid era continues to suffer from one of its most significant legacies: uncertainty.
While 2022 will be remembered for Russia's attack on Ukraine, 2023 will be recalled for Israel's war on Hamas, triggering a series of tensions in the Middle East, currently also resulting in the Suez Canal issue.

THE ITALIAN ECONOMY IN 2023

In 2023 the Italian economy slid back to the modest growth rates of previous decades, as did the European economy.
This was mainly due to rising interest rates after the pandemic and the energy crisis sent inflation rates soaring. In addition, once spending levels recovered, consumption growth rates began to decline; in 2023, at rates of about a quarter compared to those in 2022.

Rate increases are affecting domestic demand, and thus GDP, through the bank credit channel for households and businesses. For the latter, the cost of credit has increased. For households the same applies, mainly as a result of mortgages and consumer credit.

Trade was especially good in the first part of the year but then petered out in the last quarter.

ITALIAN EYEWEAR IN 2023

The Italian eyewear trend was basically as follows: in the first half of the year, exports boosted the sector tremendously, continuing to grow at double-digit rates compared to 2022, while in the second semester the monthly export trend flattened out, where not actually down on the previous year.

Based on the latest available data (October 2022), we have drafted the preliminary results for 2023, showing Italian eyewear production at 5.52 billion euros in 2023, up by 8.4% compared to 2022.

The total number of manufacturers fell by 1.7% to 816 companies nationwide.

On the employment front, the year-end seems to be positive so far: 18,620 employees, 2% higher than 2022.

PRELIMINARY RESULTS EXPORTS 2023

PRELIMINARY RESULTS EXPORTS 2023: GEOGRAPHICAL AREAS

Looking specifically at the two product macro-segments – sunglasses and frames – by geographic area, we can see that:

• The primary market for exports in 2023 continued to be Europe (in 2023 exports remained constant at over 50% of all industry exports) with an upward trend of 12.4% (+13.6% sunglasses, +10% frames)on 2022.

 

• Italian eyewear sector exports to America accounted for about 33% of all exports in the industry in 2023. However, preliminary results for 2023 show a slowdown in exports of the sun-optical area of 3.4% compared to 2022.This was driven by the negative performance of sunglasses exports to North America (-8.3%). Preliminary results for exports to Central and South America and for frames were positive.

• Asia once again benefited from its new-found international mobility: the share of Italian exports aimed at the Asian area reached 14.8% in 2023 (but it was over 16% in 2019). The growth trend of exports was +22.3% compared to 2022 (exports of frames +16%, preliminary results for sunglasses +25%).

 

• Other geographic areas were of little significance and in the preliminary results were down on 2022 (-2.4% value in exports to Africa and -3.1% to Oceania).
  
  
  

PRELIMINARY RESULTS EXPORTS 2023: COUNTRIES

The export analysis by individual country shows that:

• In the United States (which has always been the main exports market for the industry, with a share of 27.5% in 2023),overall exports of frames and sunglasses fell by 4.82%compared to 2022. Preliminary results were mainly affected by the exports trend forsunglasses in the second half of the year, down by 8.4% unlike exports of frames, which, instead grew by 6.7% compared to 2022.

 

• In Europe, Italian exports to various countries performed very well compared to 2022. In France, preliminary results for exports in the sun-optical sector in 2023 increased by 10.5% compared to 2022 (+12.7% for frames and +9.1% for sunglasses). In Germany, overall growth was 13.4% up on 2022, divided into +13.7% for sunglasses exports and +12.8% for frames. For the second year in a row, preliminary results were again very good for exports to Spain up by 15.8% in value compared to 2022 (frames exports +8.3%, sunglasses exports +18.8%). Positive, though less brilliant preliminary results for Italian eyewear exports to the UK: overall exports were up by 4.7% in value compared to 2022, with +3.6% of sunglasses and +7.6% of frames. Preliminary results for exports of Italian eyewear to some northern and eastern European countries were also positive: Sweden (+8.1% on 2022), Poland (+14.7%), Croatia (+6.5%), Austria (+17.4%).

We can conclude with the export trend of eyewear to the BRICs, which together in the preliminary results for 2023 account for just over 5% of the sector's exports (in 2019 over 8%):Brazil -0.1%on 2022, Russia +9.9%, India +18.8%, China -14.

PRELIMINARY RESULTS EXPORTS 2023: VOLUMES

In 2023, the Italian eyewear industry exported 112 million pairs of glasses, slightly more than in 2022 (+2.7%).
Of the total number of glasses exported, 67 million were sunglasses (about 60%) and 45 million optical frames (40%).

PRELIMINARY RESULTS DOMESTIC MARKET 2023

Consumption, monitored by GfK on the specialized eyewear channel, performed well in the first half of 2023 (+4.3% in value compared to 2022). In the second semester, domestic consumption also slowed down, and the preliminary results we have elaborated for 2023 show growth in value slightly above 2022.

The sell-in figure also confirms these trends.

2024 FORECAST

According to the International Monetary Fund's World Economic Outlook, growth of the world economy slowed down in 2023 and will decline further in 2024, with the slowdown having a greater effect on developed countries than emerging countries. Among the causes of the slowdown, the report points to the war in Ukraine, increasing fragmentation of the economy, and some more cyclical factors such as anti-inflationary monetary tightening, withdrawal of government aid, and extreme weather events.

2024 started with new tensions and additional risks to trade flows due to the sharp reduction in transit through the Suez Canal: maritime traffic in the Red Sea fell by more than half in January. It should be kept in mind that 90% of trade volume is by sea and 12% was through Suez; for Italy, 54% of trade is by ship, 40% of which is through Suez. The longer the blockade is extended, the greater the negative effects on global and Italian foreign trade will be.

For the Italian eyewear industry, therefore, a complicated 2024 lies ahead, where the aspect of costs forcing companies to work with increasingly lower margins, is exacerbated by the difficulty of access to credit and weak foreign demand.

“2023 still ends on a positive note, exports and production have grown, the number of companies is basically stable and employment slightly up. This is witnessed,”says ANFAO President Lorraine Berton, “by MIDO, which opens in a few days in Milan, having a really high attendance by the industry, at the Italian and international level.”

“However, the outlook for the Italian economy in 2024 will continue to suffer, as in the previous year, from a slowdown in international trade and a rise in interest rates unprecedented in the history of the euro.” continues the President–“We are all familiar with the international situation, wars, the Suez Canal question, geopolitical tensions between countries and tensions within countries (a great many), which are and will soon be affected by electoral dynamics, that only add to the general uncertainty. For our sector, exports are crucial; for us, more than for other sectors, foreign demand is the driver of Italian manufacturing and the acid test of our competitiveness in the world.”

“We are once again facing an uncertain situation, but as before -our Association will do its share, supporting companies and staking our claim to the necessary instruments, which must necessarily include a new national and European industrial policy.”

“To maintain current levels of excellence and represent the most authentic Made in Italy, we ask the institutions to encourage investment: only by investing in new technologies and new skills can we truly innovate and be competitive. Companies must be assisted in the two main challenges of today: the digital transition and the green transition. Made in Italy itself embraces-in all its forms-the concept of sustainability. Our eyewear has always been well-designed and well-made, now it needs to also be increasingly sustainable and innovative. This is a goal we must pursue with all our strength, giving free rein to creativity and resources. On this matter, we are waiting to receive urgent responses which first and foremost necessarily regard the community resources in the field, Italy’s Recovery and Resilience Plan and cohesion funds” emphasized Lorraine Berton.

“Then there is the Olympic factor reinforcing the link between eyewear and the local area, which needs to be exploited to the full” - Berton pointed out, also in her capacity as President of Confindustria Belluno Dolomiti and President of the Technical Group for Sport and Major Events of Confindustria. “Milan and Cortina will be the main venues for the 2026 Olympics: on one side there is the capital of MIDO, on the other the Queen of the Dolomites, immersed in the Belluno Eyewear District. For the eyewear industry, these Games are not a mere coincidence, but a strategic opportunity, where the beauty of the venues reflects that of the products. The Olympics are not just a sports and tourism event, but an opportunity for manufacturing itself: a showcase of Made in Italy that it is up to us to make the most of. ANFAO has already taken steps in this direction: the Olympics will bring talent and infrastructure that could become crucial for our industry.”

SUMMARY DATA GRAPHS AND CHARTS BELOW
ANFAO elaborations on data from ISTAT, Coeweb, Global Trade Atlas, INPS, CCIAA, Cerved Atoka.

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Key figures elected to lead the association for the next four years.
Made in Italy and sustainability the core focus of the new Board.

Lorraine Berton has been elected to lead ANFAO, the National Association of Optical Goods Manufacturers.The new President, the first woman in this position who will be leading the Association for the next four years, succeeds Giovanni Vitaloni, President from 2017. The appointment was made at the end-of-year Meeting, in the splendid setting of the Scuola Grande della Misericordia in Venice. The new Board, composed of VicePresidents Sabrina Paulon and Massimo Barberis, from this year President of the ANFAO Lens Group, Davide Degl'Incerti Tocci, President of the ANFAO Youth Group, Nicola Belli and Michele Gasparini, was also appointed. Attending by entitlement was the Past President.

The Board will be joined by other delegates for specific activities: Enrico Tormen, Renato Sopracolle, and Paolo Pettazzoni have been confirmed on the Technical Commission, Eurom1, and Sight Protection Commission, respectively.

Lorraine Berton, former ANFAO Vice President in charge of Industrial Relations, has extensive experience in the sector. A businesswoman, she is the owner, with her sister Elena, of the company ARLECCHINO SRL, which has been producing glasses for 35 years, and of TWO B SRL.

She also has experience in Confindustria, where she is currently President of Confindustria Belluno Dolomiti.

Also President of the Ente Bilaterale Occhialeria and the ANFAO Trade Union Commission, she decided to offer her expertise to the Association out of a spirit of service and aware that she can do an important job.

“Transparency, involvement, innovation and quality are the key values of the presidents who preceded me and they have been part of my experience in Confindustria since the start. My mission,” said the newly-elected President of ANFAO, “is to continue along this path of excellence, reinforcing these concepts and adapting them to the challenges that our industry and the world in general has and will place before us over the next four years.
The program of the team I will be leading is the result of an in-depth analysis of what we have experienced and faced in the recent past. ”She then added: “we have learned that the market pace is no longer the only element to be considered; we have to deal with the 'stability of uncertainty' and recognize the increasingly evident connection between the environment, economy, politics and society. In this context, we must seriously engage in a steady transition towards sustainable development”.

As regards the program presented, a number of main directions were identified that will define the strategy of the ANFAO 2023-2027 Board.

These will mainly focus on valorizing manufacturing and Made in Italy as well as the Association as a whole. A strong commitment will be made to consolidating Industrial Relations, with a particular focus on training.
National and international Institutional Relations will be strengthened, and the focus will be on monitoring the domestic market and strengthening our connections with distribution and the medical profession. Monitoring standardization and certification and incrementing market analysis and internationalization will be equally important. It will also be crucial to attract young entrepreneurs and to work with a view to innovation and digitalization.
Special attention will be paid to sustainability, assisting firms and adopting an industrial policy in terms of ESG.

“The greater focus on sustainability, in which ANFAO is currently investing a great deal,and will continue to do so” explained Lorraine Berton, “will further strengthen the Made in Italy eyewear industry, through the greater environmental and social sustainability ensured as a brand”.

The program guidelines were directly addressed through operating powers granted to the Board team.

GiovanniVitaloni, Past President of ANFAO,who will continue to be responsible for the Association's commercial operations (MIDO and DaTE as President of IES SRL and DaTESRL), emphasized the importance of this transition: “First of all, I would like to say that I am very happy that for the first time there is a woman President of ANFAO and in particular that this woman is Lorraine Berton. I am very grateful to her for these years in which, as Vice President, she has been one of the figures I have been able to count on most in terms of determination, experience, team spirit and initiative. I believe that for ANFAO and for the entire Association she is a truly valuable resource as President today, as the high level of the team she has formed clearly demonstrates”.

ANFAO's new President, LorraineBerton, finished by saying “I myself, as ANFAO President, will be making a cross-cutting commitment with the team and a strong commitment in the territory by continuing as President of Confindustria Belluno, dealing with the renewal of the National Labour Contract as President of the Trade Union Commission and EBO, and above all monitoring institutional relations, the key factor for promoting our association and our industry in Italy and throughout the world.”

The first important appointments that President Berton and her team will be engaged in will be the training program for managers of member companies as part of the Empowering Optical Woman Leadership project to be launched in December, finalization and launching of the CSE Certified Sustainable Eyewear certification, and, of course, MIDO, which will be held in Milan from 3 to 5 February 2024 in the Fiera Milano-Rho pavilions.

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EYEWEAR DATA FIRST HALF 2023: 
POSITIVE RESULTS ON EXPORTS & DOMESTIC MARKET
BUT THERE’S STILL TOO MUCH UNCERTAINTY
AND INTERNATIONAL FORECASTS NOT REASSURING

The first half year for the Italian eyewear industry overall confirms the trend analyzed by ANFAO for the first quarter. Taking advantage of the weak euro, exports continued to show double-digit growth in value, although more measured, during the first half of the year. Generally speaking, considering the overall economic outlook, however, a slowdown in exports is expected in the second half of 2023: growth in value at the end of the year is therefore estimated to be between 8 and 10%.

After coping with soaring costs in 2022, partially reduced for the time being, eyewear companies are now faced with rising interest rates posing a serious problem in terms of credit access.

On a general level, global uncertainty continues to be perceived. Growth of the Italian economy is slowing down: while tourism-driven services are holding their own, the same cannot be said for industry, and the construction sector is declining. Investments have therefore slowed down, contributing to consumption uncertainty and a gradual decrease in goods exports. According to international analysts, the crisis in Germany should be short-lived and the U.S. economy should continue to grow, while China, instead, is at risk of deflation.

EXPORTS FIRST HALF 2023

In the first half of 2023, exports in the industry continued a double-digit trend compared to the first half of 2022: +15.7%, at 2 billion 840 million.

Exports of frames performed very well (+19.0%), and overall exports of sunglasses maintained the momentum of 2022 (+14.3%).

In terms of geographical areas, all exports continued to grow compared to the same period in 2022: Europe + 16.2%, America +7.1%, Asia +39.4%.

An analysis of exports by individual country shows that:

• in the United States, which has always been the benchmark for the sector, the overall export of frames and sunglasses rose by +5.1% compared to the first half of 2022, with a progressive slowdown as regards sunglasses (+0.5%) compared to exports of frames, which continue to grow at a brisk rate (+23.2%).

• in the major European countries, Italian exports continued to perform well compared to the same period in 2022: France +17.2%, Germany +12.5%, Spain +20.6%, UK +2.6%.

DOMESTIC MARKET FIRST HALF 2023

The brilliant performance on international markets was accompanied by more subdued growth in the Italian market, which nevertheless significantly recovered compared to the first post-pandemic period.

Consumption, monitored by GfK in the specialized optician channel, performed well compared to the same period in 2022 (+4.3% for the January-June figure).

Closer analysis of this figure shows, alongside the significant growth in sales of sunglasses (+4.5% in value in the first half of the year), the prescription segment, which accounted for 70% of optician channel sales, divided between frames (+5.9%) and lenses (4.3%). The trend of higher performance of high value-added products was maintained, especially for ophthalmic lenses.

The sell-in figure also confirms these trends.

CONCLUSIONS

"The figures for the first half of the year confirm the positive trend of the sector. However, the complex economic scenario and the continuous rise in interest rates, impose a cautious outlook. At this time, we can expect a slowdown in exports in the short term, following market signs, such as the weakening of U.S. exports in recent months, despite maintaining high levels." said the ANFAO President, Giovanni Vitaloni.

According to the International Monetary Fund's WORLD ECONOMIC OUTLOOK, global growth forecasts were revised downwards, from 3.5% in 2022 to 3.0% for 2023.

The aspect of most concern is the growth rate in advanced economies, still the main outlet for all major sectors, and which is not expected to exceed 1.5% in 2023.

The European Area (which alone accounts for about 50% of the sector's exports) which is also particularly important for the eyewear sector would appear to have the lowest growth rate of all in 2023 according to the latest forecasts: 0.9%.

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Milan, July 7, 2023 - The ANFAO General Meeting was held yesterday in Verona, in the splendid setting of Palazzo Verità-Poeta.

The traditional summer appointment provided an opportunity to take stock of the eyewear sector and the general economic context by talking about Made in Italy, production excellence and sustainability together with ANFAO President, Giovanni Vitaloni, and the Members.

Guests at the meeting also included the Veneto Region Councilor for Economic Development, Roberto Marcato, delegated by President Luca Zaia, and, in a heartfelt and interesting video message, the Minister of Business and Made in Italy, Adolfo Urso,expressing the interest of the institutions.

Minister Urso recalled that "Eyewear is a model of Made in Italy, a synthesis of internationally recognized quality and excellence. We are the top exporter in Europe, the second exporter in the world and leaders in the high-end. This industry has a historical and cultural heritage lending form to highly valued and practical creations. " He then dwelt on the Made in Italy bill that has been approved by the Italian government and will soon begin its path through parliament, emphasizing the encouragement of "the dissemination of Italian knowledge and know-how, wealth of skills and knowledge to be passed on and invested in."
He also emphasized the aspects of innovation and sustainability as strategic for the eyewear sector.

The manufacturing excellence in the trade and Made in Italy were also central to Roberto Marcato’s speech, Councilor for Economic Development, for the Veneto region: "Eyewear is one of the most strategic industries in the region, a showcase in Italy and worldwide, thanks to its strong international vocation. This sector is a driver of economic development and employment for the entire region. Through innovation, research and design, entrepreneurs and operators maintain the value of Made in Italy high and have been able to react faster than others to the recent crises."

In thanking his guests, President Vitaloni recalled how crucial the support of the institutions is for the sector.

END 2022

Before revealing the first figures for 2023, a recap on the end of 2022, released earlier as a provisional final account, was made.

Thanks to its strong international appeal, Italian eyewear achieved brilliant results in international markets, but inflationary tensions and uncertainty weighed on the domestic market and margins.

The 2022 financial statements saw Italian eyewear production at 5.08 billion euros, up 22% from 2021. Exports of frames, sunglasses and lenses, which account for about 90% of trade production, increased by 21% over 2021, reaching about 5 billion euros (4.88 billion euros). The total number of manufacturers fell by about 2% to 830 companies nationwide. On the employment front, the industry closed with 18,250 employees, a situation that was essentially stable compared to 2021.

FIRST QUARTER 2023

In the first quarter of 2023, exports in the industry again showed a two-figure increase compared to the first quarter of 2022: +16.7% in value, amounting to 1 billion 388 million.

Exports of frames performed very well (+20.4%), with the upward trend in exports of sunglasses of 2022 also confirmed (+15.9%).

In terms of geographical areas,all exports continued to grow compared to the same period in 2022: Europe +15.1%, America +10.9%, and Asia +39.1%.

Analyzing exports by individual country highlighted the following:

• in the United States, which has always been the benchmark market for the industry, the overall export of frames and sunglasses rose by +9.1% compared to the first quarter of 2022, with a slowdown in growth for sunglasses (+1.1%) compared to frames exports, which continue to grow at a very fast pace (+35.7%).

"Despite these good results in the first quarter of 2023," said ANFAO President, Giovanni Vitaloni, "considering the general context, it is very likely that the rest of 2023 will be less brilliant for our exports, even if by exploiting the weak euro, it will still be able to grow in value. We are picking up a less optimistic outlook from our companies with regard to orders in general. The core element of this slowdown is mainly attributable to the generalized increases in costs that companies are no longer able to absorb internally."

Currently, the forecast for the first half of 2023 is for export growth around 8% compared to the same period in 2022.

According to the International Monetary Fund's WORLD ECONOMIC OUTLOOK, global growth forecasts were revised downwards for 2023 with a shift to 2.8% from 3.4% in 2022.

What is more worrying is the growth rate in advanced economies, which are still the main outlet for all major industries, not expected to go above 1.3% in 2023.

The European Area is particularly important for the eyewear sector: it absorbs alone about 50% of the industry exports and, according to the latest forecasts, appears to have the lowest growth rateof all in 2023: 0.8%.

"Certainly exports are the best instrument for measuring the health of the eyewear industry, and this gives us strength and confidence, considering the trend in the first quarter of 2023. However, we must take an extremely cautious approach, considering the general economic forecasts," concluded ANFAO President,Giovanni Vitaloni, commenting on the latest data released by the International Monetary Fund at the end of the Meeting.

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Milan, July 7, 2023 - The ANFAO General Meeting was held yesterday in Verona, in the splendid setting of Palazzo Verità-Poeta.

The traditional summer appointment provided an opportunity to take stock of the eyewear sector and the general economic context by talking about Made in Italy, production excellence and sustainability together with ANFAO President, Giovanni Vitaloni, and the Members.

Guests at the meeting also included the Veneto Region Councilor for Economic Development, Roberto Marcato, delegated by President Luca Zaia, and, in a heartfelt and interesting video message, the Minister of Business and Made in Italy, Adolfo Urso, expressing the interest of the institutions. Minister Urso recalled that "Eyewear is a model of Made in Italy, a synthesis of internationally recognized quality and excellence. We are the top exporter in Europe, the second exporter in the world and leaders in the high-end. This industry has a historical and cultural heritage lending form to highly valued and practical creations." He then dwelt on the Made in Italy bill that has been approved by the Italian government and will soon begin its path through parliament, emphasizing the encouragement of "the dissemination of Italian knowledge and know-how, wealth of skills and knowledge to be passed on and invested in." He also emphasized the aspects of innovation and sustainability as strategic for the eyewear sector. The manufacturing excellence in the trade and Made in Italy were also central to Roberto Marcato’s speech, Councilor for Economic Development, for the Veneto region: "Eyewear is one of the most strategic industries in the region, a showcase in Italy and worldwide, thanks to its strong international vocation. This sector is a driver of economic development and employment for the entire region. Through innovation, research and design, entrepreneurs and operators maintain the high value of Made in Italy and have been able to react faster than others to the recent crises."

In thanking his guests, President Vitaloni recalled how crucial the support of the institutions is for the sector.

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THE 2022 GLOBAL CONTEXT

At the gates of 2022, the world was expecting a simpler, post-pandemic period, but reality made us realise that we were facing something quite different. 2022 was a year that will be remembered in economics and history books for the Russian invasion of Ukraine, which disrupted an economic system that had yet to stabilise from the pandemic.

We have entered a world of even more rapid change, with unprecedented political and media polarisation, severe supply chain problems, spikes in inflation, debt and geopolitical conflicts. Some analysts have gone so far as to call this situation 'the new era of chaos'.

In the course of 2022, the conflict in Ukraine, the soaring cost of living and this new atmosphere of extreme general concern were the leitmotif of the entire global economic scenario. In its latest October Outlook, the IMF reported a sharp slowdown for the US economy compared to expectations at the beginning of the year, as well as for the German economy.
The worst energy crisis ever, inflation at its highest since the 1980s and rising interest rates have effectively shifted all economic growth forecasts for all countries downwards.

THE ITALIAN ECONOMY IN 2022

Despite this general climate, it must be said that the Italian economy, after an initial moment in which it seemed that it would suffer a recession in the second half of the year, over the course of the months the Italian manufacturing system has withstood the blow, continuing to grow at a good pace. So much so that it recorded the best industrial production among the major European economies since the beginning of the year.

• The reference area for eyewear exports is still Europe (in 2022 the export share remained constant, absorbing about 50% of all exports in the sector) with a trend growth of 20% over 2021 (+28.1% for sunglasses, +6% for frames).
• In America, Italian eyewear exports accounted for more than 36% of all exports in 2022. The increase in exports of eyewear was 23.2% compared to 2021.Driving this growth was the excellent performance of exports of sunglasses +27.9% flanked by +11.3% of frames.

• Asia benefited from the renewed international mobility of some countries: the share of Italian exports to the Asian area reached 13.1% in 2022 (but was over 16% in 2019). The trend change in exports was +34.4% compared to 2021 (+24.6% for exports of frames, +38.1% for sunglasses). 

• Africa remains an area that absorbs a share of the sector's exports of less than 1.5%, but which could represent a good, as yet unexpressed potential. In 2022, total Italian eyewear exports to the region remained substantially stable compared to 2021 (+0.1%).

• In Oceania, which remains a marginal area with a share of close to 0.5 per cent, Italian exports of sunglasses and frames in 2022 grew by 22.4 per cent in value compared to 2021.

PRELIMINARY EXPORT FIGURES 2022: COUNTRIES

From the point of view of the analysis by individual export countries, one can point out:

• in the United States (which has always been the leading market for the sector, with a share of more than 30% in 2022). Both sectors grew:exports in value of frames increased by 7.1% and those of sunglasses by 24.8 % over 2021.

• In Europe, Italian exports in the various countries performed very well in relation to 2021. In France, theexport forecast for the sunglasses sector in 2022 recorded +18.1% over 2021 (+5.5% for frames and +28% for sunglasses). In Germany as awhole, growth was 24.5% over 2021, broken down as +32.2% for sunglasses exports and +12% for frames. The preliminary balance for exports to Spain wasvery good, with +31.8% in value compared to 2021 (substantially stable exports of frames at +1.5%, with exports of sunglasses recovering sharply with +48.6%). The result obtained by Italian eyewear exports to the United Kingdom was the least brilliant: overall exports were +4.8% in value compared to 2021, but sustained by +8.1% in sunglasses against a negative performance of exports of frames at -3.5%. Italian eyewear exports to Northern and Eastern European countries continued to perform well: Sweden (+20.6% compared to 2021), Poland (+24.1%), Croatia (+15.7%), Austria (+17.4%), Denmark (+14.3%) and Hungary (+31.3%).

• We conclude with the trend of eyewear exports to the BRIC's, which together in 2022 absorb just over 6% of the sector's exports (in 2019 they were at over 8%). Clearly, due to the conflict, Italian exports to Russia have been heavily penalised:
• Brazil +26.5% (+23.8% sun and +30% frames) compared to 2021
• Russia -47.8% (-46.3% sun and -42.7% frames)
• India +61.9% (+73.8% sun and +44% frames)
• China +46.7% (+54.3% sun and +30.3% frames).

2022 PRELIMINARY BALANCE FORDOMESTIC MARKET

As in 2021, eyewear showed two speeds, one very fast in international markets, one with the brakes on in the domestic market.

Consumption, as monitored by GfK in the specialised optical channel, performed well with respect to 2021 (+6% the figure for January-October, the latest available); however, these values lead us to a projection in value for 2022 of a little more than 2019, very close in short to the EUR 3 billion that have been the value of the Italian mkt for many years.

An in-depth look at the data finally shows a recovery in sunglasses, but this is offset by the lacklustre performance of the prescription segment, which had recovered very well in 2021, returning to previous values. The figure for ophthalmic lenses, which now accounts for 50% of point-of-sale turnover, is confirmed.

The sell-in figure also confirms these trends.

2023 FORECASTS

Despite a less bad 2022 than expected, the general forecast for 2023 is not good.
In the coming months, the forecast scenario predicts a gradual slowdown in advanced countries' foreign trade and growth due to a number of decisive factors: high energy costs, the depreciation of the euro, below par against the dollar, record inflation in Italy and the Eurozone that does not seem to be receding, sharply rising interest rates and a widening of sovereign spreads in the Eurozone.

For the Italian eyewear industry, the issue no longer seems to be the speed of its exports, which will probably decrease, but taking advantage of the weakness of the euro in its main outlet market, the United States, it will still be able to grow in value (+6-8% is the forecast for the first half of 2023).

The real and central issue for the eyewear industry, as for most of Italian manufacturing, is that of rising COSTS.
The costs of energy, raw materials, transport, services, logistics and packaging have reached such a level that companies can no longer absorb them internally. It is estimated that they have more than doubled on average compared to the pre-pandemic period. As a result, companies are working with ever-diminishing margins that put at risk the survival of the companies themselves, especially small and medium-sized enterprises.

"We have experienced a 2022 that has shown several faces: double-digit exports, a stagnant domestic market, costs that do not seem to have a ceiling. - Says ANFAO President Giovanni Vitaloni. - Many companies, especially the small ones, are really struggling despite the fact thatcommissions and orders are not lacking right now. The effort for our companies has been to absorb the increase in costs as much as possible precisely in order to avoid a direct knock-on effect on the last link in the chain, the end consumer. However,' continues Vitaloni, 'it must be said that we are now working with very low margins, in some cases zero. This is a situation that we hope can somehow be remedied in the short term, otherwise in the long run it would mean jeopardising the companies' own investments in communication, training, research, development and innovation. And this,' concludes the President of ANFAO and MIDO, 'would really be a pity at a time when the sector seems to have returned to structural growth, as also witnessed by the great participation of companies at MIDO 2023.

GRAPHICAL AND TABULAR COMPENDIUM OF DATA
Processing by ANFAO and Confindustria Moda for ANFAO on data from ISTAT, Coeweb, Global Trade Atlas, INPS, CCIAA, Cerved Atoka.

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Data for the first quarter of 2022 were presented at the 2022 ANFAO (Italian Optical Goods Manufacturers’ Association) meeting, a key opportunity to take stock of the eyewear industry in the broader economic context. In addition to ANFAO President Giovanni Vitaloni, speaking on behalf of the public were Massimo Beccarello, Associate Professor of Industrial Economics at the University of Milano-Bicocca, also senior advisor to Confindustria for the Energy Transition, and Nicola Moro of Studio Fieschi, who shared perspectives on the new sustainability certification project and on the impacts of the current energy crisis in Europe and its effects on the eyewear industry.

DATA

Italy’s eyewear industry enjoyed a positive first-quarter 2022, especially regarding exports: ANFAO data for January-March indicate a 32.3% surge in growth compared to the same period in 2019 and a 35.3% increase over 2021.

Expectations for the coming months are for continued growth in terms of exports, manufacturing, the domestic market and employment in the industry.

The sector closed out 2021 on the “plus” side, lifting it up to pre-Covid levels. Thanks to its robust international affinity, eyewear was among the sectors that managed to respond well to the pandemic last year.
In 2021, Italian eyewear production reached 4.17 billion euros, up 35% from 2020, while exports grew by 39.9% over the previous year, to just over 4 billion euros.

CONTEXT

February 2022 brought with it the Ukrainian conflict that abruptly changed the global outlook, already impacted by uncertainties around the new variants of the Covid-19 virus.

Generally speaking, Russia is not, and never has been, a “core” market for Italian eyewear (its weight in terms of exports is valued at less than 1%). The biggest repercussion will be on the retail sector where businesses will see a decrease in purchases by Russians in Italy and in the other European countries.
From a domestic perspective, the war in Ukraine could also open a new critical phase for Italy’s economy.

However, at this time, the results for eyewear are still encouraging, especially regarding exports.

“Our industry is bearing up well under the repercussions of the global conflict, which is carrying along with it all the crises at hand: the energy crisis, inflation, increases in cost of raw materials, etc.,” stated ANFAO President Giovanni Vitaloni. “Our forecasts for this first part of the year are proving to be right on the mark, which is instilling a sense of optimism in businesses and in the whole sector. As we saw at the latest edition of MIDO, the vitality of the exhibitions and events highlights the extent to which industry professionals are motivated by the desire to do business, and this is essential to keeping our industry and the entire supply chain alive and well. Although, to date, the figures have been positive, the situation warrants constant monitoring, given the turbulent international environment.”

"An unprecedented escalation in prices was further intensified in recent months, beginning with the explosion of the conflict in Ukraine. The European energy markets are experiencing the same trend. Price risk management is very complex; the markets are extremely volatile with price levels between four and five times higher than at the beginning of 2021," remarked Massimo Beccarello, who continued, “More and more, we see crises arising in the supply chain, not only in individual businesses. As Confindustria, we are asking for economic and structural measures to be included in the government’s provisions for dealing with the energy crisis."

THE DATA

Exports which, we should recall, absorb about 90% of the sector’s production, stood at 1.190 million euros, up 35.3% against the same period in 2021 and 32.3% over 2019. This acceleration involved the sunglasses segment in particular, whose January-March 2022 exports nearly doubled compared to the previous year.  

2022 FORECAST
Based on first-quarter results, if the trend stays constant, ANFAO forecasts 10% overall growth in exports for 2022 (vs 2021), an 8-10% rise in production and a 0.5 to 1% increase in the domestic market.

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2021 ITALIAN EYEWEAR EXPORTS WERE BROUGHT BACK ABOVE 2019 LEVELS.

2022 OPENED WITH STILL POSITIVE SIGNALS.

AFTER THE PANDEMIC THE WAR IS MAKING US FEAR A NEW
SLOWDOWN.

2021: PRODUCTION +35% (+4.5% OVER 2019), EXPORTS +39% (+3.4% OVER 2019).

H1 2022: EXPORT FORECAST +10%.

2021
The outbreak of the pandemic, with the resulting stoppage of production activities in most economic systems, forcefully and immediately impacted the international exchange of goods. The resumption of manufacturing beginning in the Q3 of 2020, which in turn was favoured by the delivery of vaccines, provided new impetus to world trade, which achieved, by late 2021, pre-crisis levels in many production sectors, recouping previous trends.

Specifically, over 2021 the Italian manufacturing sector reclaimed the activity levels it had prior to the onset of the pandemic, becoming one of the primary drivers of Euro zone industrial growth. Despite a less drastic fall in production volumes during the most critical months of 2020, full re-absorption of the shock was much slower in Germany and France.

Not with standing these positive elements, mainly linked to international trade, significant demand-related issues and supply bottlenecks persisted during 2021. On several occasions, new virus variants, first Delta, then Omicron, undermined confidence of consumers and investors alike while supply chain restrictions led to a global jump in inflation.

Thanks to its strong international propensity, Italian eyewear adhered to the same dynamic.

Nevertheless, it was among the sectors that were able to react best in 2021, bringing its values back to pre-crisis levels. However, inflationary tensions and uncertainty in the domestic market still weighed heavily on demand, especially for sunglasses. In 2021, Italian eyewear production reached 4.17 billion Euros: up 35% from 2020 and 4.5% from 2019.

The total balance of manufacturers dropped slightly by about a dozen units, totalling 848 companies nationwide: 1.4% less than the previous year. Examining pre-pandemic levels instead, the decline was slightly more pronounced with about 30 fewer companies (3.5% lower than in 2019).

Nevertheless, ending the year on a good note from the standpoint of employment, the industry essentially closed with a workforce numbering 18,000. The negative balance was 100 workers (-0.6% compared to 2020 that benefited from the government-imposed employment freeze).

2021 EXPORTS

Exports of frames, sunglasses, and lenses, representing 90% of the sector’s overall production, were up by 39.2% over 2020, and by 3.4% over 2019, barely topping 4 billion euros.

From here on, we will only be commenting in detail on the sector changes compared to 2019, which were more significant than those in 2020, marked entirely by lockdowns and production stoppages related to the pandemic.

Exports of sunglasses in 2021 showed a 1.6% rise in the trend coming to more than 2.6 billion euros. On the other hand, frame exports grew by 8.1%, totalling 1.3 billion euros.

Issues concerning the procurement of raw materials, delivery times and progressive backshoring already initiated affected imports, which stopped at 1.1 billion euros, down by - 4.5% compared to 2019.

The Italian eyewear industry’s trade balance continued to increase its surplus (sending the2021 export-import balance to 2.664 billion euros).

EXPORTS BY GEOGRAPHIC AREA AND COUNTRY

Looking closely at the two product macro-segments – sunglasses and frames – by geographic area, we can see that:

 The primary market for eyewear exports in 2021 continued to be Europe (claiming just under 50% of all eyewear sector exports) for an upward growth trend of 5.6% compared to 2019 (+3.2% for sunglasses and +9.8% for frames).

 In America, the Italian eyewear export share increased in 2021 to the point of absorbing more than 36% of the sector's entire exports. Exports of sunglasses increased by 13.9% compared to 2019. Driving this growth was the excellent +15.2% performance of exports of sunglasses together with +10.9% of frames.

 Asia was forced to endure the reduced international mobility as well as the shipping cost increases that characterized much of 2021. Thus, the Italian share of exports to Asia was stopped at 12% (it was over 16% in 2019). Therefore, the export trend variation in2021 was negative: -22.7% compared with 2019 (-5.3% for exports of frames and -28.8% for sunglasses).

 Although Africa claims less than 2% of current sector exports, it shows good potential for growth, which is as yet untapped. In 2021, total exports of Italian eyewear to the area returned to the same levels as in 2019, increasing by just +0.1%.

 In Oceania, which is still marginal, with less than an 0.5% of market share, Italian exports of sunglasses and frames grew in 2021 by 9.4% in value compared to 2019.

The export analysis by individual country shows that:

 in the United States (which has long been the eyewear industry’s primary export market, with an almost 31% share in 2021), overall exports of frames and sunglasses increased by + 20.6% over 2019. Growth occurred in both sectors: the value of frame exports increased 15.1%, and exports of sunglasses 22.7% still compared to 2019.

 Obviously, the performance of Italian exports to the various countries in Europ performed very well compared to 2020. However, considering the 2019 benchmark, the performance was affected by the different countries’ recovery rates, which was especially penalizing in Spain. In France, 2021 exports of the sun-optical sector showed +3.5% growth over 2019 (+8.4% for frames and -0.1% for sunglasses). The outcome achieved by Italian eyewear exports to the United Kingdom went beyond expectations. Overall, exports recorded a +16.8% rise in value over 2019 (+19.8% for sunglasses and +9.7% for frames).

Germany’s overall growth came in at +5.6% compared to 2019: broken down into +6.3% for exports of sunglasses and +4.6% for frames. Italian eyewear exports to Spain were still very far from 2019 levels, where the trend variation was -20.4% compared to 2019, with an especially poor performance by sunglass exports (-27.4%) and a substandard trend for frames (-3.7%). Italian eyewear exports to Northern and Eastern European countries showed pleasantly surprising performance: Sweden (+60.1% compared to 2019), Poland (+32.1%), Croatia (+12.3%), Austria (+13.1%), Norway (+30.6%), Denmark (+7%) and Finland (+35.6%)

 Concluding with the eyewear export trends to the BRICS, where altogether in 2019, about 8% of the industry’s exports were absorbed, the share dropped to just north of 6% in 2021:

- Brazil, -38.4% (-41.2% sunglasses and -34.4% frames) compared to 2019
- Russia -3.7% (+1.2% sunglasses and -11.5% frames)
- India, -41.9% (-58.8% sunglasses and -6.3% frames)
- China, -16.6% (-22.8% sunglasses and +0.9% frames).

THE ITALIAN GLOBAL EXPORT MARKET SHARE

Based on the global export market for sunglasses and frames, which in 2021 was worth just under 18 billion euros (-1.3% compared to 2019), the Italian market share was valued at 22%, second only to China. If only high-end product exports were considered, exports to Italy would still be in first place with a share value of just over 70%.

EXPORTS BY VOLUME

The Italian eyewear industry exported about 105 million pairs of eyeglasses in 2021, slightly more than in 2019 (+1.9%).
Of the total number of pairs exported, 64 million were sunglasses (61%) and 41 million optical frames (39%). In particular, the volume of exports of sunglasses decreased by 3% while exports of frames increased by 7%, compared to 2019.

THE DOMESTIC MARKET

Comparing the international and the domestic markets, it could be stated that Italian eyewear has returned to pre-pandemic levels only internationally. If in fact exports exceeded 2019 values, considering the domestic market, despite the great recovery over 2020, 2019 values still remain higher. Moreover, it should not be forgotten that the domestic market trends were already not especially brilliant in the years prior to the pandemic.

Consumption, monitored by GfK in the specialized optical channel, showed excellent performance trends compared to 2020 (+17%) and a slight dip compared to 2019 (-0.5%) stopping at about 3 billion euros.

Looking more deeply into the data however, it becomes apparent that the problem is linked to sunglasses, whose consumption in 2021, in the optical channel, showed a -23% drop in value compared to 2019. On the other hand, prescription eyewear components showed an excellent recovery compared to 2019: frames (+6.3%) and ophthalmic lenses (+9.1%). It should be noted that ophthalmic lenses now account for more than 56% of turnover for stores.

The pandemic changed consumer attitudes in many directions, including in the world of eyewear. The phenomena we witnessed, especially in the domestic market, in 2021, were certainly linked to increased use of digital screens (of all sizes) and greater attention to consumption linked to personal care and healthcare.

In this sense, this clarifies the greater demand for prescription eyewear, which has been more often than not, premium quality. Consumers are no longer willing to just pay the lowest price. Rather, when it comes to their wellbeing, they seem to be making more and better-quality choices that actually meet their needs.

Sunglasses have been penalized in these two years of pandemic mainly due to the reduction in outdoor life, travel, and participation in sports, all of which were often the source of sunglass purchases. It is an entirely different market where impulse counts more and where the luxury-price polarization is more marked. It is also a market where many more distribution channels come into play, made more problematic by the increasing importance of e-commerce and online purchasing.

2022

Russia’s aggression toward Ukraine this past February 24 suddenly changed the global outlook, already marked by uncertainty linked to new variants of the Covid-19 virus.

While in fact, the world economy has continued to seek a new equilibrium after two years of pandemic, the attack, in an attempt to bring the Ukrainian people to their knees, has led to a severe recession in Russia. Significant price rises for many raw materials has resulted in tensions causing consequential trade blockages as well as appreciable uncertainty about future prospects that weighs on households and businesses.

In general, Russia was not, and has never been, a “core” market for Italian eyewear (in terms of value, its weight in terms of exports of both frames and sunglasses is less than 1%). The biggest backlash at the sector level, especially retail, will be in terms of a decrease inpurchases by Russians in Italy and in the other European countries.

Then there is the important theme of the energy crisis. The rising costs of energy and commodities, which already affected production costs in 2021, is worsening quite significantly. Because of the war in Ukraine, gas and electricity costs have doubled, which, together with increases in transport, logistics and packaging, just to mention the most important items, will weigh heavily on companies’ budgets.

Unfortunately, the war in Ukraine could open a new critical phase for the Italian economy.

Inflation (+5% in 2022) could undermine the spending of households and businesses, global supply chains could come to a halt, central banks might change their approach and implement more restrictive policies, financial markets could very well become hostages to the growing uncertainty. All of which would result in a decrease in GDP.

2022 EYEWEAR FORECAST

Based on the data available to date, ANFAO’s forecasts for exports project positive monthly results, but foresee lower figures from April onwards.

H1 of 2022 could close with around 9 to 10% more in exports than in 2021 (around 222 million more in terms of value).

Considering that H2 of 2021 was very good for exports and that currently, international conditions are very uncertain, it seems difficult to think that last year's values can be surpassed by much. H2 of 2022 could show a +0.5% increase in value for exports compared to 2021.

Overall, the forecast for Italian eyewear exports in 2022 could show growth of around 4 to 5%.

As far as the domestic market is concerned, considering the previous and current general difficulties, the forecast for the end of the year is one of substantial stability compared to 2021 (+0.5%).

Likewise, production could see growth of 4-5 percentage points.

“In terms of recovery of pre-pandemic values, we saw a particularly important 2021.
Unfortunately, we still have to deal with a great deal of uncertainty, exacerbated by the conflict in Ukraine, and the resulting international tensions,” stated ANFAO President, Giovanni Vitaloni. “The forecasts we have made, however, reflect a vein of optimism that seems to imbue the sector, which we hope to be a good omen for the MIDO 2022 event, and which should represent the real and definitive re-launch of the sector.”

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Milano, September 30, 2021

The first half of 2021 has raised the confidence of Italian eyewear players: ANFAO data from the January-June period improve expectations and anticipate a complete return to 2019 levels as early as year’s end.

Key features:

• Above all optical frames for exports and ophthalmic lenses in the domestic market are leading the recovery.
  
  
• The main export markets for Italian eyewear are all showing revival. For some of these, eyewear sales have already returned to pre-covid levels.

DATA

2021 is likely to be crucial for the recovery for global economies, also due to the massive influx of Covid vaccines.
China and the United States were able to react immediately to the crisis and were the first to meet the recovery head on, as early as last year.
In terms of infections and resumption of business as usual, the vaccine has certainly played a key role in Italy. Confidence among households has taken a positive turn while spending levels have also risen. Investments, production and exports, especially in the manufacturing sector, have shown fast reaction times and are on their way to a strong recovery. Even the outlook for public accounts appears to be better than expected.

Nonetheless, there are still some critical factors that could undermine this general recovery, starting with the substantial uncertainty instilled by variants of the virus and by the course of the pandemic and vaccination campaigns.
In Italy, inflation trends and the announced increases in energy prices, the boost to the recovery given by the construction sector (will this be sustainable over the medium- to long-term?) and, above all, compliance with the conditions imposed by Europe for Italy’s Recovery and Resilience Plan, will all require close monitoring.

In this general setting, Italian eyewear is also following this track, with a recovery that appears to be exceeding forecasts for early 2021.

“2020 was an extremely challenging year for the sector and for our entire ANFAO System - both for the Association and for our industry-leading trade fair: MIDO,” stated President Giovanni Vitaloni.“We had anticipated that 2021 would be a somewhat subdued transition year, as we waited to see a recovery of pre-Covid values only in 2022. The first half year’s data, from both domestic consumption and above all from exports, have instead allowed us to adjust our forecasts for the better, to the point of believing we might just reach 2019 levels by the end of this year. Even at the trade fairs that are finally popping up again on the markets: take for example, DaTE or SILMO, held just a few days ago, where there were clear signs of recovery and a strong desire to start back anew. From this standpoint, I am viewing the next MIDO with great optimism. Even though there is still an atmosphere of having to coexist with the pandemic, this trade fair truly offers an invaluable opportunity for relaunch.”

EXPORTS

Exports, which we should recall make up around 90% of the sector’s production,stood at €2,034 million, up over 52% against the same period in 2020, and only 4 percentage points below 2019 levels.

This acceleration was more markedlyobserved in the frames segment, whose exports in the January-June 2021 period surpassed the levels of the same period in 2019. 
Less enthusiastic were the exports of sunglasses, which recovered nicely over 2020, but which still remained negative compared to 2019 (-6.7%).

Encouraging data come from the monthly export trends for the first half of 2021 that were actually very similar to those from 2019 and even exceeded those levels in April and June.

However, by far the most interesting and encouraging analysis for Italian eyewear is by geographical region and country.
Exports recovered nicely in all geographical areas compared to 2020.
The most significant figure, however, was the result in value achieved compared to the same period in 2019 for exports to Europe and America, which together claim well over 80% of the sector's total exports:

• exports to Europe +55.6%
• exports to America -4%.
  
  

Even greater optimism arose from the export analysis to individual countries, which shows that among the main markets for Italian eyewear the gap compared to 2019 was either partly or totally closed, except for Spain.

THE DOMESTIC MARKET

In the first half of 2021 there were encouraging signs even on the domestic market for Italian eyewear.

Though the recovery was clear compared to 2020, where sales in the eyeglass channel for the first half of 2021 grew by more than 30 percentage points, they were still about 4% below the levels of the same period in 2019.

This dynamic seems to be following the general Italian eyeglass market trend from recent years: growth propelled by ophthalmic lenses (and within that, moved by the segment with the highest added value - progressive lenses) and partly by frames. Sunglasses, which recovered well from 2020, remained somewhat sluggish and still far from 2019 levels.

In this context, it will also be necessary to monitor the online channels, which are seeing significant growth for the sunglass sector, also due to advanced digitalization, greater familiarity with digital tools and almost immediate availability.

2021 FORECAST

Based on the first half year’s results, ANFAO revised its forecasts for 2021 upwards. If the trends were to remain constant, the sector would close the year at a slightly higher value (between 0.5% and 1%) than in 2019, both for exports and for production.

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EYEWEAR: 2020, A DRAMATIC YEAR
SIGNS OF GROWTH FOR 2021, BUT FORECASTS STILL AT A LOSS COMPARED TO 2019.
TO RETURN TO PRE-COVID LEVELS, THE SECTOR LOOKS AT 2022

The ailing Italian eyewear industry is looking towards the early signs of 2021 to relaunch itself: this is revealed by ANFAO data referring to 2020, presented today at the press conference of MIDO Digital Edition, the world eyewear show, this year with an exceptionally virtual format.

Some highlights:

• Exports of frames, sunglasses, and lenses, representing around 90% of Italian production in the sector, plummeted by 26% compared to 2019, with the sunglasses segment suffering the most (-27%). 
• Sharp drop in production of 22.6% compared to 2019.
• The number of companies and employees working in the sector remains stable, but this should be reassessed in 2021, taking into account the effects of the Italian Law Decrees on economic restoration.
• In the early months of 2021, only a few signs of recovery are expected, with more encouraging signs to come only during the second half of the year.

THE DATA

The year 2020 saw significant impacts of the pandemic on the global economy, with China partly involved as early as late 2019 and countries in the rest of the world progressively implicated in parallel with the worldwide spread of the contagion, for the duration of at least 10 out of 12 months.
Therefore, on a global scale, the impact has been strongly asymmetric both geographically and on the different economic and production segments based on their position within the essentiality chain.

If at the onset of the global health emergency, the two economies driving the growth were the US and China, the spread of Covid-19 has marked the gap even further and has, for example, widened the growth gap between Europe and the US. At the same time, significant differences emerged between all the players in the manufacturing sector in particular, based on their ability to integrate cross-cutting transformations, from digital to automation, from health protection to environmental sustainability.

In Italy, 2019 already showed a critical downward trend in global economic growth, and 2020 saw the emergence of further difficulties: manufacturing activities suffered a sharp slowdown and an immediate and violent impact from the pandemic.

In particular, the situation has been erratic in the industrial sector, with a V-shaped trend and the hope of recovery only in the second half of 2021; instead, the expectation of returning to pre-Covid levels is currently stretching to 2022.

In this troubling scenario, the eyewear sector is no exception, where production and exports have returned to 2013 levels: production in 2020 was 3.089 million Euro, a drop by 22.6% compared to 2019, exports closed at 2.882 million Euro, a decline of around 26% compared to 2019. In just one year, around 1,000 million euros were burned in terms of both production and exports.

During the lockdown periods due to the pandemic, eyewear companies manufacturing medical devices (eyeglasses) and personal protective equipment (sunglasses) could carry on their activities after securing their sites, since they were a critical part of the supply chain for producing essential goods. Similarly, opticians have been allowed to re-open their shops once they have implemented the necessary anti-Covid measures.

Despite this, the sector suffered greatly due to the lack of international mobility, which held back exports, and due to a general decline in consumption, which penalised sales, especially of sunglasses.

A realistic assessment of the production sector and the workforce can only be carried out after the gradual return to normality with the phasing out of social shock absorbers and the end of emergency measures such as the ban on redundancies. The relaunch of exports should allow previous employment to be maintained.

EXPORTS IN 2020

Exports of frames, sunglasses and lenses, which account for around 90% of the sector's production, stood at 2.882 million Euro, a drop of around 26% compared to 2019.

The segment that suffered the highest loss was sunglasses (-27%), which stood at 1.871 million Euro.Exports of frames, on the other hand, fell by 22% to approximately 936 million Euro.

At the monthly level, exports showed the V-shaped performance: an extremely critical trend since the beginning of the year, with the figures falling sharply to a low point in April 2020 (-70%), only to recover to acceptable levels, but still below 2019 only from July onwards.

EXPORTS BY GEOGRAPHICAL AREAS AND COUNTRIES

By focusing on the two product macro-segments as a whole, sunglasses and frames, in relation to the geographical areas in detail, we can observe that:

• The reference area for eyewear exports is still Europe (in 2020, it accounts for 51% of all exports in the sector), and in the Old Continent, the sector has seen an average drop of 23%, with a higher impact on sunglasses.

 

• By 2020, exports to America (the target market for about 33% of Italian eyewear) dropped more than 26%, with even greater loss frames.

• In Asia, reached in 2020 by more than 14% of Italian exports, the decrease was about 34%, with the most severe impact on the sunglasses segment.

 

• Africa remains a small market for the sector, with 1.3% of exports, although in 2019 it proved to be a growth area with good potential.

• In Oceania, which is still a very marginal area with a 0.5% share of the Italian market, exports in 2020 reveal a slightly bigger drop compared to the previous year (-14.5%).

The analysis by individual countries of export shows:

• The United States accounted for the largest market share (over 28%), but overall exports fell by over 21%.

 

• Next in line, among the largest market shares, are two European countries: France, where exports decreased by around 23%, and Germany, where Italian exports dropped by 15.6% in 2020. Other European countries followed with major decreases: The United Kingdom (-29%) and Spain (-40%).

• Finally, we conclude with the trend in eyewear exports to the BRIC countries, which together account for over 10% of the sector's exports, with one country, China, alone representing 4.3% of the market.  In 2020:
• Brazil -49%
• Russia -22,7%
• India -49,5%
• China -35,4%.

THE DOMESTIC MARKET

According to the sales data of the optical channel, monitored by GfK Retail & Technology Italia, the domestic market in 2020 suffered a strong downturn: - 14.4% in value compared to 2019 for a total of 2.500 million Euro. A loss of approximately 400 million.
The most significant drop was recorded in sunglasses sales (-32%), followed by frames (-8.5%) and finally, ophthalmic lenses (-7.9%), which are obviously more related to the actual need to adjust one's vision defect and less likely to be purchased.

OUTLOOK 2021

2021 began amid the third pandemic wave and, simultaneously, with the arrival of vaccines and the hope of national and international recovery.
However, due to limited international mobility, restarting production did not coincide with the revitalisation of exports, nor did it lead to the recovery of all consumption, which was still too shrouded in a climate of mistrust and uncertainty. Specifically, the postponement of medical examinations also had the effect of slowing down the recovery of the eyewear sector and the sunglasses sector, which is more linked to the fashion world.

Exports in the first part of the year were still lacklustre, too tied to limited international mobility.
On the other hand, the domestic market showed a slight recovery compared to 2020, especially for frames and ophthalmic lenses, which returned close to 2019 levels.

The situation of the first quarter of 2020 as a whole was therefore very delicate. Finally, in April, the Italian economy saw some positive signs thanks to the change of pace brought about by the national vaccination plan and the progressive opening plan that boosted consumer and business confidence.
In contrast, the world seems to be recovering, and international trade is already growing above pre-Covid levels. Such growth is still led by Asian countries, China above all, and the United States.

Based on current evidence, we have estimated that exports in the sector will increase in value by 10% compared to the first half of 2020 and 19% compared to the second. As a result, by the end of the year, the sector will record an overall export growth of 15% compared to 2020, but still 14 percentage points lower than the growth reported in 2019.

The actual revival with the achievement of pre-pandemic values will most likely take place in 2022.
At that point, we will be able to continue to reaffirm and consolidate what have always been the records of the Italian eyewear sector:

• Europe leading manufacturer of sunglasses and frames
• Europe leading exporter of sunglasses and frames
• the World second-largest exporter of sunglasses and frames
• the World leading manufacturer and exporter of high-end sunglasses and frames.

 

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AFTER A REASSURING 2019 IN TERMS OF EXPORTS, REVENUE AND JOBS, THE 2020 PANDEMIC-RIDDEN FORECAST FOR iTALIAN EYEWEAR IS GRIM

2019: PRODUCTION +3.3%, EXPORTS +3.9%, JOBS +2.3%
2020: EXPORTS FORECAST -25%, PRODUCTION FORECAST -15%

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