ITALIAN WW2 Start Information:
~ In our new AXIS vs ALLIES 3 game we're trying to not only figure out exactly what the minors would start with, but Italy as well. There is much to consider. The reality of it is that Italy was large on paper, but in reality they had many financial, economic, political and research issues.

Historic Problems With Italy:
1. Italian industrial sector was relatively weak compared to other Europeanmajor powers. Italian industry did not equal more than 15% of that of Franceor of Britain in militarily critical areas such as automobileproduction: the number of automobiles in Italy before the war was around 374,000, in comparison to around 2,500,000 in Britain and France.
2. In 1940, Italy produced 4.4 megatonnes(Mt) of coal, 0.01 Mt of crude oil, 1.2 Mt of iron ore and 2.1 Mt of steel. By comparison, Great Britain produced 224.3 Mt of coal, 11.9 Mt of crude oil, 17.7 Mt of iron ore, and 13.0 Mt of steel and Germany produced 364.8 Mt of coal, 8.0 Mt of crude oil, 29.5 Mt of iron ore and 21.5 Mt of steel. Most raw material needs could be fulfilled only through importation, and no effort was made to stockpile key materials before the entry into war.
3. Almost 40% of the 1939 budget was allocated for military spending.
4. Italy's extreme debt position.
5. By the end of the war, the Italian economy had been all but destroyed; per capita income in 1944 was at its lowest point since the beginning of the 20th century.

For Comparison:
Gross National Incomes:
USA: 84.7 billion dollars
Britain: 27.51 billion dollars
France: 18.28 billion dollars
Germany: 41.97 billion dollars
Italy: 8.68 billion dollars
GDP
USA: 650 dollars
UK: 550 dollars
France: 470 dollars
Germany: 600 dollars
Italy: 230 dollars

Steel production (1940):
UK: 13.2 million tons (1937)
France: 7.9 million tons (1937)
Luxemburg: 2.47 million tons (1937)
Belgium: 3.8 million tons (1937)
Germany: 23.3 million tons (1938)
Italy: 2.3 million tons (1938)

1943:
USA Coal: 586 million tons
Oil: 191 million tons (1942, including Mexico's)
UK Coal: 202 million tons
USSR Coal: 53 million tons
Oil: 18 million tons
Germany Coal: 640 million tons (Germany proper, 268 million tons, occupied territories 86 million tons)
total: 640 million tons of fossil fuels or 360 million tons of oil equivalent


Italy Total energy consumption (coal, oil, natural gas) in 1941 at 17 million tons of coal equivalent, or 12 million tons of oil equivalent.

In reply some important factors about the Italian start are:
Industry: Resources- Answers (some are educated guesses):
At start values:
The 50K Oil and 500K 'money' (potentially less) is probably a good stab at an estimate.
-The 500K at start value is probably too much. The Italians had 15% inflation, soon 70% inflation, bad unemployment, a huge debt, etc. and still suffering from the depression.
The 50K oil is only because Mussolini 'made the trains run on time' to give the CoW ability to upgrade infrastructure. To see what the goods & steel production should be, let's look. The real issue is that
- Italy produced 2.1 Mt of steel (megatonnes = Mt).
- The U.K. produced 13.0 Mt of steel.
- Germany produced 21.5 Mt of steel.
Steel: Italy = 1.2 Mt, Ger. = 21.5 Mt, Italy should have very little. So if Germany has 1.3 million steel... Italy should have perhaps (x 0.5% of Germany) = 65K steel. I would imagine that the U.K. conversion would be something similar.
Goods: This is extremely hard to estimate. I would imagine that goods are the supply of factories, iron ore, coal, guns, explosive material, cloth, leather, rubber, as well as some political interference, manpower, workforce all curtailed by a countries economy.
Italy = 4.4 Mt of coal, Germany produced 364.8 Mt of coal.
So, here goes:
If the CoW values are Germany = 900K'ish (by the straight coal conversion) Italy wold only have 1.5% of Germany. I believe that they have terrible iron ore, however good factories, little cloth, no rubber, some leather, etc.
Like the sources say, except in the north they're agriculturally based, and import most of their goods. So... given their good manpower and little materials, and their 15% auto industry of U.K./France, they should probably have
250K goods. Historically Germany did give Italy steel and oil.
A huge issue is that 'Italian industry did not equal more than 15% of that of France or of Britain in militarily critical areas such as automobile production.' That has to be addressed. By this it would seem that a good amount of infantry could be made, potentially a good amount of ships, artillery, AT & AAA guns etc. as well. It's just the vehicles. A good player will build lots of armor, Italy just couldn't do that. Rationale is that Badoglio was so uninterested in mechanized warfare that his only recorded comment on a perceptive army intelligence analysis of German methods in July 1940 was ‘we’ll study it when the war is over.' Also you just don't create Ford and GM plants quickly. The same goes for more Fiat and other Italian manufacturers.
Italian Research:
Armor-
At the start of World War 2 the Italian tank designs equipping their armored units were themselves more than serviceable against allied tanks of the same era. Individually they suffered from poor reliability and build quality.
The main issue behind these vehicular deficiencies is again strategic. The lengthy, bureaucratic design and development process often meant that introducing comparable developments years behind those of the armies they were fighting. Outdated arms procurement thinking in terms of planning dogged future weapons needs. The standard tank gun of the Italian armoured vehicles of 1943 still being of 47mm calibre. This all meant that Italian troops were being equipped with new tanks late in the war which were really 1930's designs and having to fight vehicles two or three generations ahead of them. These failing coupled with slow unit production facilities in Italy, when compared to the Allies or fellow axis powers rate of vehicle production, further compounded the combat capabilities of the Italian Army.
What elements of mechanized warfare Italy did have was substandard; inferior and under-engineered equipment and armaments from FIAT and other Italian manufacturers put the already imperiled Italian troops in further danger. Italian-made tanks, whose inferior armor plating was penetrable by small-arms fire put an immobile infantry at increased risk. This armor lacked communications until 1941 – depriving tank crews the critical capability of inter-armor communications as well as with infantry.
Artillery-
Italy had outdated artillery whose range was roughly one-third that of British and French artillery, established an army which had difficulty in defense of itself and mainland Italy – let alone an army with imperialist ambitions.
Navy-
The Royal Italian Navy, or Regia Marina, was only slightly better positioned than its Army counterpart – which is saying little. Lacking any carriers early in the war, owing to the notion by Mussolini that “Italy itself was an aircraft carrier,” Italy lacked the essential capability of naval airpower at sea.
Subs-
The Italian Navy did possess an adequate submarine fleet at 113 boats. Its challenge was not in numbers, but rather in level of sophistication and a lack of any adequate war-fighting doctrine. They were slow to dive, had inferior if not deadly air conditioning systems, and lacked any type of attack computers. Italy, a peninsular nation, should have possessed a more-than-adequate navy with its imperialistic agenda – that coinciding with Nazi Germany. Unfortunately, the navy did not meet this minimum “bar.”
Aircraft-
The Italian Royal Air Force, or Regia Aeronautica, faced similar challenges and the fate as the Army, hostage to sub-standard technology which put them behind their German and Japanese allies in terms of performance and airworthiness. Unable to produce any reliable long range four-engine bombers early on, the Royal Air Force relied on open-cockpit biplanes such as the FIAT CR 42 as their standard “fighter” – a key aircraft in a large fighter force. A staple of the bomber force, the Savoia-Marchetti s.79 was Italy’s three-engine medium monoplane; fast and maneuverable, it was a liability due to its instability in turbulent conditions. Italian air power suffered due to a viable doctrine, under-engineered aircraft, and cohesive inter-military cooperation and planning.
So, bottom line... they are a bit behind in research at the start, but would probably not be able to use both available (2) research slots. Historically they were behind & stayed behind, with infrequent upgrades.
I am all ears for any opinions on Italian at start values. There's lots on the internet about it all.