Italian Business Confidence Rises to 14-Month High
Italian business confidence rose to the highest in more than a year in November on expectations that exports will help the recovery gather pace after the worst recession in six decades.
The Isae Institute’s manufacturing sentiment index climbed to 78.8 from a revised 77.4 in October, the Rome-based research center Isae said today. The reading compared with a median forecast of 78 in a Bloomberg News survey of 16 economists.
“The data confirms a positive trend for the output, a further sign that the worst is over,” said Silvio Peruzzo, an economist at Royal Bank of Scotland in London. “However, manufacturers need to rely on exports while domestic demand remains weak due to the growing unemployment.”
Italy emerged from the recession in the third quarter as the global recovery helped exports increase 6.6 percent in September from the previous month. The country posted a trade surplus in October compared with a deficit from a year earlier, national statistics institute Istat said today. After previously forecasting 0.7 percent growth for 2010, Finance Minister Giulio Tremonti said on Nov. 24 the economy may expand by “more than 1 percent” next year.
“Greater confidence is due to an improved outlook for orders, especially from abroad, and rising expectations on short-term production,” Isae said in today’s report. “Inventories remain below levels considered normal.”
Stimulus Spending
Government stimulus measures across Europe helped auto sales recover from a global decline caused by the recession. In Italy, they benefited the country’s biggest manufacturer, Fiat SpA. Sales of the Turin-based automaker rose 15 percent for the month of October.
Incentives to trade in old cars for newer models are due to be phased out and unemployment is still rising, which may weigh on consumer spending. Italy’s jobless rate climbed in the second quarter to a seasonally adjusted 7.4 percent, and will rise to 8.5 percent next year and 8.7 percent in 2011, the Organization for Economic Cooperation and Development said on Nov. 19.
Consumer confidence unexpectedly rose in November as optimism on economic growth outweighed concerns on the outlook for the labor market, Isae said yesterday. Manufacturers were more pessimistic about the job market than consumers, today’s report showed. A sub-index measuring expectations on employment fell to minus 17 in November from minus 16.
Isae conducted its latest survey of 4,000 companies between Nov. 2 and Nov. 18. The research center revised its October reading from an initial 77.1.