Turkish gold rush boosts Italian jewelry exports

Soaring gold demand in inflation-ravaged Turkey has provided a welcome boost to Italy’s jewelry industry, with exports from the Tuscan district of Arezzo surging 133 per cent in the first quarter compared to 2023. This increase, according to a report by Intesa Sanpaolo, offsets a decline in leather goods sales from the nearby Florence area.

Fueled by high inflation, Turkish consumers are turning to gold as a safe haven investment. This surge in demand propelled Arezzo’s jewelry exports to €1.8 billion ($2 billion) in the first quarter, a significant jump from €800 million the year before. The positive trend extends to other Italian jewelry districts like Vicenza and Valenza Po.

Meanwhile, the luxury goods slowdown continues to impact Florence’s leather industry, with exports dropping 23 per cent to €1.35 billion in the first quarter. This decline is attributed to several factors, including a cooling-off in demand from major markets like China, leading to brands like Gucci placing workers on furlough.

The report by Intesa Sanpaolo highlights the contrasting fortunes of different sectors within Italy’s specialized manufacturing districts. While fashion-related industries experience a drop in consumer spending and supply chain adjustments, other sectors like Tuscan olive oil exports have seen a remarkable 72 per cent year-on-year increase to €382 million.

Overall, exports from Italy’s industrial districts witnessed a modest 1.1 per cent decline, reflecting a global slowdown in trade since spring 2023. However, it’s important to note that this comes after a period of strong growth, with district exports reaching record highs in 2022 and remaining stable in 2023. Compared to pre-pandemic levels, overall exports are still nearly 20 per cent higher. Notably, the only exception is the fashion industry’s intermediate goods, which have fallen 10 per cent compared to the first quarter of 2019.

Attribution: Reuters

Sub-Editing: Y.Yasser