Economy in Slovenia Depends Greatly on Manufacturing

Slovenia Manufacturing

Manufacturing has played a leading role in the rise of large industries at the helm of the world market. Manufacturing currently accounts for 30% of Slovenia’s gross domestic product, a very relevant sector in its economy.

The more than 3,000 manufacturing companies generate revenues of over 7 billion euros per year–more than half of these profits come from exports. Trading partners include France, Germany, Spain, United Kingdom, United States and Italy.

Manufacturing Education

During the last few years, the manufacturing industry in Slovenia has had to face several challenges to keep up with modern processes, as they are extremely behind other countries. They have had to modify traditional methods and move toward automation, new materials, and new intelligent processes. The Slovenian government has encouraged innovation in manufacturing, with the help of several companies, and with the creation of educational institutions. These institutes create knowledge to improve productivity and competitiveness, especially in the metals industry. The 2015 census indicated that the number of student careers closely related to these processes such as metallurgy and mechanical engineering was around 10,000. Such changes in processes and techniques are considered necessary as part of the future of manufacturing, sometimes referred to as Manufacturing 4.0.

Unparalleled Craftsmanship

The manufacturing industry in Slovenia, however, still has sectors where the human hand is strictly necessary and is vital for the development of products. Here, we refer specifically to fashion design, lingerie and the textile industry where automated processes cannot yet supply demand nor craftsmanship for the traditional artistry. Perhaps this is for best. The worldwide decline in human manufacturing processes is a result of the use of robots and automated machines. However, the impact in Slovenia could negatively impact the Slovenian economy, which has a very low unemployment rate and good per capita income.

Despite being years behind in manufacturing automation, the Slovenian way of life is thriving. They value their workers and pay them well for their craftsmanship. Looking toward the future, the Slovenian government is improving manufacturing education, the fuel of future economies.

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Italy Has a Very Diversified Manufacturing Economy

Italian manufacturing

In the globalized world of today more and more the economies of the countries seek to diversify in manufacturing. Given the volatile prices of commodities, diversification is a risk that not many can take. Manufacturers generate greater added value for their countries, and in turn, greater profits for a homeland.

In the case of Italy, we find that it is the eighth largest economy in the world and the third largest in the eurozone, only behind Germany and France in that order. Italy also one of the countries that achieved a successful transition from the agricultural economy to a manufacturing economy. This success change gives Italy 23.9% to the nation’s GDP by 2016.

Italy’s real growth rate has been 0.8 percent the last two years. Between 2017 and 2018, according to OECD data, the Italian economy is estimated to grow another 1% each year. This recent advance in the Italian manufacturing industry awakens mixed feelings among opinion makers and public policy makers. It is considered favorable by many because of the greater ability of companies to penetrate foreign markets. On the other hand, many fear economic activities that may lead to the opening of factories abroad.

Iron and Steel

The consumption of iron and steel was considered for decades a standard indicator capable of measuring the economic development of a nation. Italy’s steel industry has often been a driving force in the expansion of the industrial sector. The availability of raw materials, the low transportation costs, and most of all the sea, have contributed to the birth of large steel centers in coastal countries.

Economy Hits Automotive Industry

It is not a secret to anyone that the automotive industry is a vital sector to Italy, due to its high demand and a high degree of added value which translates into higher profits. Italy, along with Germany, is one of the countries with the most developed auto industry. Unfortunately, between 2004 and 2013 cars produced downsized by 51% compared to the previous decade. The economic crisis in Italy and Europe resulted in decreased consumption. The effects were particularly problematic for cars. But this is not the first drop in auto production. Statistics show the automotive sector has been declining for a long time. Between 1994 and 2003, the production recorded an 18% decrease.

Despite these falls, what the future holds seems to be interesting for the industry, since the projections for the automotive industry for 2020 speak of a growth of 2.6%.

Textiles

In the textile sector, we find that the Italian district of Emilia-Romagna is one of the most prominent and prosperous clusters of the textile and clothing industry in the world. Italy is the second largest exporter of both textiles and clothing if the intra-EU trade is included. However, in this segment of the market, there is a trend towards the relocation and outsourcing of production to decrease costs.

In fact, Italy exports approximately 50 percent of its production of clothing. Their competitive advantage lies in the positioning of their products in the minds of consumers. This has allowed, beyond the problems of the industry (such as high costs of electricity, government bureaucracy, and legal rigidity) to charge a “Premium” that allows covering the costs and thus to obtain profitability.

Classic Ceramics 

The birth of the industrial ceramic districts was facilitated by the simultaneous presence of several factors, including the centenary tradition. Other factors include the availability of skilled labor and capital. The Italian ceramic industry is now a sector with 236 companies and 27,000 employees, capable of invoicing 5.5 billion euros. The main destination area for Italian ceramic products is France and Germany which are foreign historical markets. Also significant is the presence of Italian products in the Americas, mainly in the United States.

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Mexico is Home to Global Leaders in Manufacturing

Mexican Manufacturing

Throughout the Americas, Mexico is a leading supplier of products and services. They export mainly to the US and Canada, but also to countries throughout South America. As such, manufacturing has always played a major role in the Mexican economy. However, today, it is more important than ever. According to the CIA, industry makes up 33.1% of Mexico’s GDP.

Leading economists believe Mexico will soon be a power player in global manufacturing and exports. With recent movements, three sectors stand out among the rest.

Bread & Beverage

The food and beverage industry in Mexico is perhaps one of its biggest claims to fame. While Mexican food is a huge part of the country’s cultural identity, we are talking about bottling and bread specifically. FEMSA is the largest manufacturing enterprise in Mexico, and they are responsible for the famous “Mexican Coke” made with real sugar. Thanks to FEMSA, Mexico is the owner of the largest Coca-Cola bottling plant in the world which accounts for more than $17 billion dollars in revenue each year.

BIMBO is the second biggest manufacturer in Mexico. With global dominance in sweet bread, sandwich bread, and hot dog & hamburger buns, BIMBO is the largest bakery manufacturer in the world. In the last few decades, they have formed major partnerships with international enterprises like Coronado, George Weston Limited, Panrico, Weston Foods Inc and Canada Bread allowing them to become leaders in Europe, South America, and Asia.

Automotive Manufacturing

With recent changes in the U.S. administration, one question on the line is whether American car manufacturers will bring their Mexican plants to the United States. Now, automotive manufacturing is one of the most important sectors since it generates 4% of the Gross Domestic Products. The exchange rate makes the labor affordable, and the geographic location of Mexico is ideal for exporting goods. In addition, Mexico has trade agreements that make international commerce easy. These are the benefits that attract many large automotive manufacturers.

In the seventh place of the biggest automobile producers in the world, Mexico is marking a figure of 1.5 million new jobs and a little less than 4 million vehicles produced in the year. With a combined sale of more than $37 billion USD, the leading giants in vehicle production are General Motors, Fiat-Chrysler, and Nissan. Mexico is beginning to recognize brands like Chevrolet, GMC or Cadillac that are located under the matrix of General Motors who in fact has the largest plant in the world outside the United States.

Manufacturing Technology

Mexico has always been a big consumer of technology products, but in the last few years, they have become huge exporters of computers, tablets, and smartphones. The technology sector has made the most rapid growth in recent years with new investment from Samsung. This $300 million USD effort to expand operations in Mexico helped the country to obtain an advantageous position in the global technology market. LG, Panasonic, and other competitors are also well-placed in Mexico, but none are as influential as Samsung.  Samsung is now the eighth largest enterprise in Mexico exceeding annual sales of more the $5 billion USD.

With global dominance in bread, and a rapid advancement in technology, there is no slowing the success of Mexican manufacturing. While politics may pose a threat the automotive industry, the beverage & bread, and technology sectors alone, are enough to make Mexican manufacturing impressive.

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