GDP: Faini Observatory, after October decline, slight growth in November

In November, the update of the monthly estimate of real GDP indicates a slight recovery in economic activity, witnessed by a variation of 0.1% m/m for the reference month and an upward revision of 0.1pp ad October as the contraction in industrial production (-1.0% m/m) was less than the internal estimate (-1.5% m/m). This was revealed by the analysis elaborated for the Adnkronos of the Tor Vergata Foundation, directed by Beniamino Quintieri, through its Faini Observatory, created in collaboration with the Ministry of Economy and Finance, which elaborates and comments – every month – on the results of the real GDP for each month.

The drop in October follows the -1.7% in September, bringing the industrial production index back below the June values. However, despite the period of difficulty in manufacturing, the monthly GDP trend was probably positively influenced by the drop in the prices of energy raw materials. An indication in this sense is provided by the increase in electricity consumption of energy-intensive companies and by the growth of heavy motorway traffic.

Consistently, the most recent forward-looking indicators confirm these trends, albeit within an overall macroeconomic framework characterized by signs of weakness in activity: in fact, in November, the climate of consumer confidence recorded a marked rebound, favored by better prospects on the situation economic future and by the reduction of expectations of price increases, accompanied by the recovery of business confidence after four months of decline, widespread in all sectors with the exception of the construction sector.

This trend is also confirmed by the PMI indices for November, which record marked improvements compared to the previous two months, even though they are below the threshold for business expansion. In particular, the services PMI recovers to 49.5 from the previous 46.4 and the construction PMI, in contrast with the sectoral confidence climate, rises to 52 after having been in contraction territory for four months

“The first estimate of the monthly indicator of GDP for November marks a slight monthly increase, equal to 0.1%, after a month of stagnation in October, however revised upwards in the light of the Istat industrial production data for that month, less negative than expected”, commented the Chief Economist of the Treasury, Riccardo Barbieri. “The growth of the GDP for the fourth quarter acquired in November is slightly positive, according to the indicator. The Italian economy continues to show considerable resilience; it is no coincidence that many forecasters’ expectations of a cyclical downturn are shifting towards 2023. In this regard, much will depend on the evolution of energy prices, a fall in which could reverse the surge in inflation and lead the European Central Bank to a position less restrictive than indicated in the press release and in today’s decisions. The result would be more favorable GDP growth prospects than the stagnation or slight recession expected by most forecasters.”