So the heat will kill Italian companies: who risks the most

So the heat will kill Italian companies: who risks the most

Sales of low energy class apartments are expected to decline steadily, leading to LOWEST PRICES EVER. In Mediterranean regions, the number of firms, especially agricultural, construction and manufacturing firms, is expected to decrease, while such activities will increase in more temperate regions. To the south, the tourism sector and services will hold some resistance. Rising temperatures not only negatively affect economic growth, but also redefine business activities, creating a greater divide between different regions of the country.

This is confirmed by two studies conducted by analysts of bank of italy, who analyzed the effects of extreme heat on businesses and the housing market. These studies are based on observations from previous years in which a certain temperature threshold has been crossed, i.e. 25 degrees for the real estate market and 30 degrees for the business sector. As extreme hot days increase, the impact on the economy becomes greater, and this trend is expected to continue in the future.

How will the heat stop the real estate market and business?

In real estate, heat negatively affects the number of searches and transactions, causing a 0.2% decrease in average price, Which lasts for at least twelve months. This results in a total loss of revenue of around 80 million Euros per year. However, there is a redistribution of demand as buyers look for better-equipped homes with higher energy ratings (A, B or C), open spaces and air-conditioning systems.

Similar but biased effects have been observed in the corporate sector as well. When the temperature rises, a Gradual reduction of enterprises in hot areas and increased temperatures with more moderate temperatures in central and northern Italy (or the mountainous regions of the south). This does not necessarily indicate a physical movement of businesses, but rather an increase in closures and a decrease in revenue in areas most affected by the heat, and the opposite effect in temperate areas.

According to Bank of Italy analysts, an overall reduction is expected in the period between 2020 and 2031 0.22% of companies Due to rising temperature. The effect is not uniform: in temperate regions, firms are expected to increase by 0.27%, while in Mediterranean regions, an overall decrease of 0.35% is projected. These forecasts can be mitigated by specific interventions, such as those envisaged by the National Recovery and Resilience Plan (PNRR), which can make companies more resistant to climate change.

most affected areas

In the absence of such interventions, the economic differences between northern and southern Italy are expected to widen further. The businesses that will be most affected by high temperatures will mainly be those agriculture and construction sector, This is followed by manufacturing industries, especially in the southern regions. However, the tourism sector and services should remain in better shape.

Factors such as the size and age of firms will affect their adaptability. Companies young and large, it seems, are better able to adapt to warmer days and even increase their profitability. On the other hand, older and smaller companies may lose profits due to a sudden rise in temperature.