The confidence of Italian companies at the highest
Posted on Jul 29, 2021, 1:03 PMUpdated on Jul 29, 2021, 3:01 PM
While waiting for its economy to really find color, Italy is smiling again. The business confidence index reached in July its highest level since the start of these statistics in March 2005. A feeling of confidence that greatly exceeds the level before the coronavirus pandemic underlines the National Institute of Statistics (Istat ).
The business index jumped from 112.8 to 116.3, from 99.1 in February 2020, before the start of the pandemic. For comparison, it hit a low in May 2020, at 53.4. The construction sector is the sector with the most marked rise in morale, followed by services and retail trade. The increase is much more limited for the manufacturing industry, which fears difficulties in the supply of raw materials.
Significant increase in consumer morale
While Italy was hit by one of the worst recessions in the eurozone with a plunge of 8.9% of its GDP, the feeling that the end of the crisis is near also restores consumer confidence. The index continued to rise, recording a record since September 2018. It went from 115.1 to 116.6, against 110.8 in February 2020. The perception of the economic climate by households has risen sharply, the personal situation is also considered to be better.
« The morale of companies and that of households are intimately linked, » said Lino Stoppani, vice-president of Confcommercio and president of FIPE (Federazione Italiana Pubblici Esercizi), representing companies in the catering and hotel industry, for whom « the good morale of some conditions that of others and vice versa. This return of optimism is explained by the marked improvement in the health situation with the success of the mass vaccination campaign, the presence of Mario Draghi in power which is a pledge of seriousness and the prospects of the European recovery plan for ensure the return of growth. Finally, there is the climate of the Tokyo Olympics and that of the football team’s victory at the European Championship which gives the feeling of a return to normal life. «
Italy is expected to experience higher growth this year than Germany
The title of European football champion could, according to estimates, lead to economic benefits of the order of 0.7 percentage point of GDP. Italy’s growth could reach 5.1% in 2021, according to the country’s central bank. Forecasts better than + 3.6% for Germany, the transalpine press boasts. « We must not let our guard down, especially regarding the health situation, » warns Lino Stoppani. The economic situation will indeed see a clear improvement but the return to the level before the pandemic will not be achieved until the second half of 2022 or the first half of 2023 provided there is no backlash linked to the Covid ”.