The global recovery, which has been underway since mid-2016, does not disappoint the expectations of great vivacity. So 2017 is set to become the first year since 2011 in which forecasts are not only confirmed but even revised upwards. This is the monthly analysis published today by the Confindustria Study Centre.
The impetus draws strength from its unity: both the advanced countries, including the Eurozone and Japan, as well as the USA, and the emerging countries (China and India, but also Russia and, belatedly, Brazil).
The manufacturing industry, whose production is observed to be rapidly increasing almost everywhere, is the driving force; foreign trade, which has returned to vigorous expansion, is the driving belt. The strong link between the former and the latter are investments: the CSC has identified concrete signs of the start of a new international cycle of purchases of machinery and plants, which is fueled by higher demand expectations (which thus tend to self-fulfill) , very favorable financial conditions (low cost of capital, loans and shares, with interest rates at their lowest and stock exchanges at their highest) and saturation of existing capacity. Risks remain: the spread of protectionism (reaffirmed by the outcome of the G20) and other populist measures (also adopted by governments that do not present themselves as such); political uncertainty, with important elections in Europe and consequences of the results of last year's polls (Brexit, US presidential elections). Compared to the global scenario outlined three months ago, the main changes are the drop in oil and other raw materials and the weakening of the dollar; the former should not have the negative effects observed two years ago, while the latter is limited for now.
The FED, on the other hand, proceeds to normalize monetary policy, while the ECB has only started talking about it (and not officially). In Italy extremes coexist. On the one hand, exports outpace the reference markets and conquer shares and investments are brilliant (+7,6% in machinery and means of transport in 2016); a sign that the incentives work and that companies respond. On the other hand, growth remains low, the political future is more uncertain and bank credit is scarce.
Italian GDP is also expected to grow at a slow pace at the beginning of 2017, after +0,2% in the 4th quarter of 2016. Affected by the negative trend in industrial production, which fell more than expected in January (-2,3 % versus -1,2%); despite the good rebound of 1,3% in February (CSC estimates), the acquired in the quarter is -0,3%. In construction, activity marks -3,8% in January (-2,5% for purchases).
Qualitative surveys paint a more positive picture. In the manufacturing sector, in the first 2 months of 2017, the confidence index rose to 105,7 (+2,5 points on the 4th quarter of 2016) and the balance of production expectations to 12,5 (from 10,7 in the 4th). . Greater optimism also in construction (+0,4 points). The composite PMI in February signals an acceleration: +2,0 points, to 54,8 (53,8 in the 1st two months from 52,5 in the 4th quarter of 2016); the strengthening regards both the tertiary sector (+1,7 points, to 54,1) and manufacturing (+2,0, to 55,0). However, the OECD anticipator, down by 0,04% in January (to 100,1), does not herald a greater boost in GDP in the central part of the year.
In January, Italian exports increased, at constant prices, by 0,2% over December and are 2,3% above the average of the 4th quarter of 2016 (when it had grown by 2,1%; CSC estimates). In 2016, employment rose by 1,3%. 2017 opens well: increase in employment in January compared to December (+0,1%, equal to +30 thousand units).
Attachments: Monthly analysis of the Confindustria Study Centre
