Between "lights and shadows", with "energy prices falling and inflation still high", and industry "in decline", the Italian economy is performing "better than expected", notes the Study Center of Confindustria in its monthly 'flash' analysis on the situation and forecasts.
"The gas price at its lowest level for over a year and the stability of total household purchasing power support activity at better levels than expected, as confirmed by confidence and recovering stock market indexes. Negative the sharp rise in interest rates takes effect, which takes away resources from investments and consumption, also affected by inflation".
The analysis by the economists of via dell'Astronomia highlights how much "cheaper energy" is, with the fall in the price of gas "favored by still high European gas stocks, a mild climate and slower consumption", and for oil " thanks to a production that has overcome a flat demand".
While "non-energy prices are up slightly (+1.6% in
November-December), after the decline in the previous months, to the high levels of 2021".
The scenario is affected by the "strong tightening on rates. In November, the cost of credit for Italian companies continued to rise: 3.37% for SMEs (1.74% at the beginning of 2022), 2.67% for large companies ( up from 0.76%). rise", with the ECB which "announced new increases in the official rate in the coming months (according to futures, from the current 2.50% to 3.50% by December 2023)".
Industry is "in decline. Production recorded another decline in November (-0.3%; -1.8% in September and -1.1% in October); manufacturing is holding up (+0.1% ), with wide heterogeneity between sectors, while the energy supply sector contracted (-4.5%).For the fourth quarter, the change acquired was very negative for the total industry (-1.7%, -0.6% in the third). The qualitative data in December signal a weak scenario: orders continue to decrease, inventories increase, expectations of a rebound are reduced; the PMI is still in an area of slight contraction (48.5 from 48.4) , business confidence marks a new decline".
The CSC analysis also highlights the "difficult" situation for the construction sector which "started the fourth quarter badly (-0,
5% production in October-November), after the decline in the third and the previous expansion.
The difficult phase is expected to continue: the data on building permits signal a sharp drop (-12.6% in the summer months in terms of surfaces
residential)".
