Rome – Fewer and fewer apartments in the lower energy categories will be sold at ever lower prices. and in the Mediterranean regions the number of firms, particularly agricultural, construction and manufacturing, will decrease, which will instead increase in the “temperate” regions; In southern tourism and services resist. Not only does the increase in temperature negatively affect growth, but it redesigns economic activities, increasing the distances between regions of the country: two studies just published by the Bank reconstruct the effects of excessive heat on the business and real estate market of Italy, signed by Michele Cascarano, Filippo Natoli and (for the first two works Just) Andrea Petrella. The two studies begin by analyzing what has actually happened in recent years when temperatures have risen above a certain threshold, which is 25 degrees for the real estate market and 30 degrees for the business system. Excessively hot days always tend to increase, so the effects on the economy are more and more frequent, and one can imagine that they will be more and more in the future.
In the real estate market, the heat slows searches as well as the number of sales: the result is an average drop of 0.2% in prices, which lasts for at least twelve months. The total loss in terms of receipts in one year is calculated in the order of 80 million euros. These are medium in size, because what is really happening is a redistribution of demand: with the heat, ambitious buyers tend to look for better equipped homes, class A, B or C, with outdoor spaces and an air conditioning system.
Even among firms, there are disproportionate effects, even if we cannot speak of redistribution because what the three economists note is a gradual decline of firms in hotter regions when the temperature rises, and an increase in those with more moderate temperatures than central and northern Italy. (Or the mountain in southern Italy itself). But companies are not moving: Excessive heat is simply accelerating lockdowns and reducing revenues in the warming regions, while the opposite effect is recorded in temperate regions.
Bank of Italy analysts assume that between 2020 and 2031 there will be a 0.22% decline in business due to the heat. It may seem a little: calculated on approximately 5.1 million Italian companies, it amounts to just over 11,000. But this is an average: in moderate regions there would be an increase of 0.27% (the result of a combination of an increase in revenues of 0.09% and a decrease in spending of 0.18% ). On the other hand, in the Mediterranean regions, an overall decrease of 0.35% will be recorded in the same period, as a result of a decrease in new business by 0.2% and an increase in exits from the market by 0.18%. Moreover, these numbers indicate which companies will suffer the most from the effects of the heat, which will nevertheless have repercussions for all companies in the Mediterranean regions, reducing their performance and profitability.
All of this will happen in the absence of specific interventions, of course: Pnrr can help companies become more agile. Otherwise, the gap between north and south will widen more and more. And also because agriculture and construction companies will be most affected by the high temperatures, followed by manufacturing, which is already less prevalent in the south. While tourism and services will resist more.
The size and number of years on the market also play in favor of less or greater resistance: the younger ones have a competitive advantage over the older ones who may have invested a little over the years to prevent the influence of meteorological phenomena. In fact, the analysis of financial statements shows how small and large companies can better adapt to hot days, and even increase profitability; On the other hand, larger and smaller companies see their profits shrink after sudden temperature increases.
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