Spring could also bring peace of mind for the Italian economy.
The president of the ECB Mario Draghi said on March 26, 2015 at a House hearing that the Quantitative Easing (QE) should pick up Italian GDP by 1% by 2016. Economists seem to agree on the fact that the drop in oil prices and the depreciation of the euro will help revive Italy's economy (apart from the economist Giorgio La Malfa, who calls for caution). Businesses are optimistic: the manufacturing PMI has returned above the 2015 threshold since February 50, which signals economic expansion. Credit Suisse is also optimistic and speaks of a “new Renaissance” for Italy. Will it be true?
Some first, timid signals are coming. But caution is a must.
The consumption
They take the lion's share of signs of recovery. First of all, large-scale distribution, hit hard by the crisis, is starting to raise its head again. According to Nielsen, in the first week of March 2015, the turnover of large-scale retail trade (acronym for large-scale retail trade) grew by 0,78% nationwide, mainly driven by the North West (+0,30%). It should also be noted that the hypermarkets kept their turnover stable.
But it's not just the consumption of consumer goods that is doing better. A Credit Suisse report for investors released on March 25, 2015 titled “Italy Between Recovery and Reform: A New Renaissance?” first of all it signals the recovery in consumption of a durable goods such as automobiles. According to the DMV, 2015 cars were registered in February 134.697: +13,21% compared to February 2014. In the same period, 377.619 transfers of ownership of used cars were registered: +6,90% compared to February 2014.
Application for credit from households
In addition to consumption, families are starting to take more money to borrow from banks to buy homes. According to Crif, a company specializing in the development of credit information systems, after the 41% drop in 2012, mortgage applications began to rise at the end of 2013. The demand for consumer credit also increased: +10% in February 2015 alone.
Job application
Another excellent signal comes from hiring. It will also be the effect of the three-year tax relief for new hires introduced by the 2015 Stability Law, but the fact is that "in the first two months of 2015, 79 more permanent contracts were activated than in the first two months of 2014”. This is a leap of 35%, explained the Minister of Labor Giuliano Poletti, presenting the data on the mandatory communications of the Ministry of Labor on 26 March 2015. Boom in particular for the age group between 15 and 29: for them an increase by 40%. But… in the second half there are also a couple of “buts” that shouldn't be underestimated.
The “buts” of the recovery
The three signals of recovery should be taken with caution: just as "a swallow does not make spring", so a signal does not make recovery. So much so that, for now, these signals have yet to be reflected in Italy's GDP and industrial production, which are still close to zero.
These disappointing data also explain why the recovery is slow to be reflected on the labor supply side (the number of people willing to offer their work services): unemployment in Italy exceeds 12% for adults and is at 41,2% for young people (source: Istat, data updated to January 2015). A significant drop in unemployment will take time, given that the first to relocate will be workers who have suffered a reduction in working hours, who will return to full employment.
In any case, even if Italy at the moment can benefit from a global economic context favorable to recovery, it must not delude itself that it can rely on "good luck" forever. Not if he really wants to take the path of a lasting and sustainable recovery.
