in action pessimism among Italian companies, increasingly concerned about high energy prices and inflation. He certifies it the survey conducted by Bank of Italy between 25 August and 15 September 2022 at Italian companies in the industry and services with at least 50 employees.
The results paint a bleak picture. “Assessments on the general economic situation worsened further in the third quarter”, explains the survey, which underlines: “The pessimism of companies on their operating conditions in the next three months has worsened, continuing to mainly reflect uncertainty attributable to economic and political factors and the trend in the prices of raw materials”. According to Bankitalia, almost a third of companies believe that the difficulties related to the cost of energy are higher than in the previous quarter. Not only that, "The boost in demand, which had supported activity in recent quarters, has failed and the expectations of companies do not envisage a recovery in the coming months", continues Via Nazionale. Finally, a moderate one fits into this context downward revision of investment plans for 2022 by industrial companies in the strict sense and services, which however would continue to increase spending. The only positive note concerns employment, which should continue to expand, albeit at a slower pace than in the past.
The pessimism of Italian companies: all the data from Bank of Italy
In the third quarter of 2022 77,9% of companies believes that the general economic situation has worsened, 14% more than in the previous quarter. 9 out of 10 companies think that the probability of an improvement in the general economic picture would not exceed 25% (it would be zero for around 60%). Pessimism does not only concern the present, it also lacks the near future: the negative balance between expectations of improvement and deterioration it widened to 49,2 percentage points from 19,6 in the previous survey.
These assessments are based on “the uncertainty attributable to economic and political factors and the high prices of energy raw materials; both of these factors would have a very negative impact for more than a quarter of businesses”, reports Bankitalia.
In detail, for 31,2% of companies the difficulties associated with the cost of energy increased compared to the previous quarter (the share was 17,7% in the survey three months earlier). The picture is particularly unfavorable for the construction companies, among which 73% experienced similar or greater difficulties compared to the previous quarter (up from 68,1), compared to 65,2 among those ofindustry in the strict sense (from 56,9) and 43,7 in services (from 35,4).
As in last quarter, i supply problems of raw materials and intermediate inputs involved around 60% of companies in industry in the strict sense and services and around 85% of construction companies.
Inflation expectations
Even for companies, inflation represents a real sword of Damocles. Indeed, in the third quarter, “consumer inflation expectations increased further”, exceeding 6% over 12 months and reaching values around 5% even over more distant horizons (2 years and 3-5 years).
"Also there dynamics of the prices charged by businesses has strengthened and should remain sustained in the next 12 months, driven by increases in production inputs and by higher inflation expectations”.
The occupation resists
“QXNUMX Employment Outlook remain overall favourable“, reports the Bank of Italy. “The share of companies in industry in the strict sense and in services that expect to expand the number of employees was 5,6 percentage points higher than that of those who expect a reduction, a smaller gap rcompared to the previous survey (15,7)". “Expectations – underlines the Via Nazionale survey – are more favorable in the construction sector, where the balance increased slightly to 11,7 percentage points (10,8)”.
Stronger banks
Italian banks present a stronger situation “compared to previous crises”, a percentage of non-performing loans that remains low and a slightly decreasing capitalization but “higher than before the pandemic”. And yet, warns the CEO of the Bank of Italy Luigi Federico Signorini, “they remain very exposed to risks” economic cycle and should exercise “caution when making their risk and capital management decisions”.
