Italian Business Confidence Rises to 18-Month High on Recovery
Italian business confidence rose to the highest in 18 months in December on expectations by manufacturers that growing exports will boost the economy’s recovery from the worst recession since World War II.
The Isae Institute’s manufacturing sentiment index climbed to 82.6, the highest since June 2008, from a revised 79.4 in November, the Rome-based research center Isae said today. That compared with a median forecast of 79.7 in a Bloomberg News survey of 8 economists.
The survey showed “a strong recovery in production expectations and in the assessment on orders, the ones from abroad in particular,” Isae said in the report. “Inventories remain stable and below levels considered normal.”
The $2.3 trillion economy expanded 0.6 percent in the three months through September after five quarters of contraction as exports grew. The economy may grow 1.1 percent in 2010, employers’ lobby Confindustria forecast on Dec. 17. Exports to non-European Union countries rose 2.6 percent in November after falling 9.1 percent in October. Economic growth in France and Germany, which emerged from the recession in the second quarter, is also supporting Italian manufacturers.
The rise in confidence in Italy mirrored gains in optimism in Europe’s largest economy. Business confidence in Germany increased to the highest level in 17 months in December as the global recovery supported exports and manufacturing growth, the Munich-based Ifo institute said on Dec. 18.
French business confidence fell in December for the first time in nine months on concern that fading government-stimulus measures may slow the economy’s recovery from its worst slump in six decades, Paris-based statistics office Insee said last week.
Reduced Stimulus
Government incentives across Europe contributed to the recovery of auto and home appliance sales from a global decline caused by the recession. In Italy, they benefited Fiat SpA, whose Italian sales rose 28 percent in November from the previous year.
Italy’s government plans to reduce incentives to trade in old cars for newer models to 300 million euros ($432 million) next year, Il Sole 24 Ore reported on Dec. 27. Italy set aside about 400 million euros to spur sales of more fuel-efficient cars in 2009.
Manufacturers remain pessimistic about the job market on expectations that hiring will lag the economic recovery, today’s report showed. A sub-index measuring expectations on employment held at minus 18 in December.
The jobless rate climbed in the third quarter to the highest in four years, Istat said on Dec. 17. Rising unemployment and reduced stimulus may weigh on consumer spending in coming months.
Isae conducted its latest survey of 4,000 companies between Dec. 1 and Dec. 18. The research center revised its November reading from an initial 78.8.