Industrial production in Italy falling, Istat: down 1.5% in November

The findings: -3.1% in one year, family confidence improves, ECB rate increases are over but there is a risk of increases, an uncertain global economy

Industrial production is falling in Italy. TO November 2023 the seasonally adjusted index is estimated to decrease by 1.5% compared to October. On average in the September-November quarter there was a decline in the level of production of 0.8% compared to the previous three months. This was revealed by Istat.

The monthly seasonally adjusted index, according to Istat, marks cyclical reductions in all sectors: negative variations characterize, in fact, capital goods (-0.2%), intermediate goods and consumer goods (-1.8% in both groupings) and, to a more marked extent, energy (-4, 0%).

Net of calendar effects, in November 2023 the overall index decreases in trend terms by 3.1% (calendar working days were 21 as in November 2022). Trend increases were recorded for energy (+1.0%) and capital goods (+0.6%); However, consumer goods and intermediate goods show a decline (-5.7% in both groups). Among the sectors of economic activity, the manufacturing of coke and refined petroleum products shows a large trend growth (+13.1%), followed by the manufacturing of means of transport (+2.1%) and the manufacturing of machinery and equipment ( +0.8%). The greatest declines were recorded in the wood, paper and printing industries (-12.7%), in the textile, clothing, leather and accessories industries (-9.3%) and in the manufacturing of rubber and plastic materials (-8.5%).

“In November, for the second consecutive month, there was a cyclical decrease in the seasonally adjusted index of industrial production. The overall economic trend on average over the last three months was also in decline. The negative tone of November is widespread across all main sectors. In trend terms, net of calendar effects, a decline in the general index is observed. Again on a trend basis, positive variations are recorded for energy and capital goods, compared to declines for consumer goods and intermediate goods”, comments Istat.

“Industrial production falls, family confidence improves”

“In November, the industrial production index in Italy recorded a further more pronounced economic decline compared to that of the previous month. The decline was widespread across all the main industrial groups”, notes Istat in the monthly note. “The purchasing power of families, after the fall in the fourth quarter of 2022, has been on an upward path. The same dynamic has been observed for the propensity to save which, however, continues to remain lower than pre-Covid levels “, he adds. “In December, the results of the surveys signal an improvement in the confidence of families and businesses which in both cases returns towards the levels of July 2023”.

In December, confidence surveys showed signs of improvement, writes Istat, explaining that business confidence began to increase again after four consecutive months of reduction and reached the highest level since last July. The index was driven by the market services sector and to a more limited extent by the construction sector (for which an improvement in all components is estimated) and retail trade. In manufacturing, however, confidence decreased following assessments on orders and inventories of finished products that were essentially stable compared to November and significantly worsening production expectations. Consumer confidence increased for the second consecutive month and also returned to the July 2023 level. There was a general improvement in all the components of the index with the exception of the opinions on the opportunity to save in the current phase , which remain substantially stable compared to last month.

The composite economic confidence index ESI grew in December in Italy (+2.6 points), Spain (+2.4) and Germany (+2.4), while it decreased in France (-0.5).

Labor market conditions remain solid

“The conditions of the labor market remain solid. In November, compared to the previous month, the number of employed and inactive people increased, while the number of unemployed people decreased”, explains Istat.

Price increase below Eurozone average

“In 2023, on average, inflation measured with the harmonized consumer price index (HIPC) fell to 5.9% from 8.7% in 2022, progressively reducing over the course of the year and reaching 0. 5% in December. Since October, price growth in Italy has been lower than the euro area average”, ISTAT further notes.

ECB rates, increases finished but risk of increases

“The phase of increase in official interest rates by the Federal Reserve and the ECB should be essentially concluded.” Istat states this in the monthly note, observing that “the uncertainty that characterizes the international scenario, however, remains high and new price increases cannot be ruled out if the cost of energy returns to being a risk factor, also affected by the geopolitical tensions in the Middle East”.

In the euro area, he adds, inflation increased in December and this trend could continue into the first part of this year. The latest data seems to confirm the European Central Bank’s forecast according to which the consumer price index, after reaching a minimum in November, should stabilize during 2024 still above the 2% target and then decelerate again the following year .

Uncertain global economy

At the end of the year, the international economic prospects remain very uncertain, dominated by geopolitical tensions, for which there is no imminent resolution, and by financial conditions that are still restrictive for families and businesses, we read in the monthly note.



Source-www.adnkronos.com