Italian economy slowing down e industry in crisis. The descent of the ratesThis is what emerges from the data contained in the December Flash Conjuncture published by the Study Center of Confindustria.
Stagnation or restart?
High uncertainty on Italian GDP in the 4th quarter, after the stop in the 3rd: on the one hand, confidence is low, industry in crisis, exports weak, the Eurozone sluggish; on the other, on the upside: the growth trend of tourism and services, the continuation of the decline in rates, low inflation, the implementation of the Pnnr. Conjunctural factors are pushing upwards, but are holding back some structural obstacles.
Rates fall but French spread rises
After the cuts in official rates in recent months, the markets expect further cuts this week from the ECB (3,25%) and next week from the Fed (4,75%). In Europe, French sovereign rate is rising in reflection of thepolitical instability and of the growing debt and the spread on the German Bund (+0,75 in December from +0,65 in September) has risen beyond that in Spain (+0,64 from +0,76) which is narrowing as well as in Italy (+1,02 from +1,27) and Greece (+1,26 from +1,50).
Lower inflation
in november theinflation in Italy it rose to +1,4% per year, closer to the core measure (+1,9%), given that energy prices are decreasing less (-5,5%). Similar trajectories in the Eurozone, but on values above the ECB threshold: total at +2,3%, just below the core (+2,7%), energy decline almost over (-1,9%). This is due to the gas price in Europe, which in November rose to 44 euros/mwh (+2,7% annually) and in December approached 47 euros, also dragging electricity prices upwards; the price of oil, on the other hand, at 74 dollars in November, is still falling in annual terms (-10,4%).
Tourism-driven services
The driver of the services remains the tourism of foreigners in Italy, which continues to expand (+6,9% annual spending in September). However, indications for the 4th are discordant: in October Rtt (Csc-TeamSystem) indicates an increase in service turnover, but in November the PMI slipped into the contraction zone (49,2 from 52,4) and business confidence was eroded in October-November.
In October, production remained unchanged, but continued to register a sharp decline (-3,6%), which was profound for auto (-34,5%), leather goods (-17,2%), refined petroleum products (-15,8%). In terms of turnover, Rtt indicated a positive rebound in October. In November, moreover, business confidence stopped its decline, but the manufacturing PMI fell even more (44,5 from 46,9).
Investments in reduction
In November, continue to business confidence drops (Iesi at 93,1, from 95,5 in September) and demand, measured by goods orders, remained low although recovering from the minimum in October (-22 the balance). This anticipates weak investments also in the 4th quarter (-1,2% in the 3rd).
Volatile consumption
I household consumption in the 3rd quarter they increased well above expectations (+1,4%), thanks to several positive factors: rising incomes, reduced inflation, cheaper credit. On the other hand, indications for the 4th quarter are weak: household confidence fell in October-November (96,6, 1,2 points below the average of the 3rd); in October, car registrations fell for the sixth month (-0,8%) and retail sales underwent a sharp downward correction (-0,8%) after the jump in September.
Weak exports
THEItalian export of goods, after three consecutive quarterly drops (-0,2% in volume in the 3rd), remains weak in the 4th. The Extra-EU sales fell in October (-3,5% in value), due to the slowdown in the US market and the fall in exports to the China (-21,3% annualized in the first ten months). The outlook is still very uncertain, according to foreign manufacturing orders in October-November: the weakness of European demand and the announced new US protectionist measures weigh heavily. Negative indications for world trade from the PMI foreign orders, in the contraction zone in the last six months.
Eurozone still weak
The confidence indicators, while remaining bassi, show a certain stability in expectations in the Area: sentiment on the economy, after moderate growth in the 3rd quarter (+0,3%), is slightly down in the first two months of the 4th (-0,2%); expectations on employment, however, after the decline in the 3rd (-1,6%), returned to positive territory in the 4th (+0,4%). However, manufacturing continues to decline (PMI at 45,2 from 46,0) and services also slightly contract again (48,3 from 50,0).
US: Industrial activity weak
La industrial production The 4th quarter also opened in decline (-0,3% in October) and the economic indicators signal further weakness in November: the Chicago index fell to 40,2 points from 41,6, the ISM
(48,5) and the manufacturing PMI (49,7) remain (slightly) recessive. Instead, the good employment dynamics (+227 thousand units) continues to fuel consumption, which confirms itself as the engine of the US economy in this phase: +0,4% retail sales in October.
China is growing
Industrial production accelerated in November, driven by new orders (which marked the highest growth in the last three and a half years) and the rebuilding of inventories, reflecting increased confidence in the outlook. The government has made public the commitment of relaunch domestic demand e stabilize the stock and real estate market, including through unconventional policies: the first step was to change monetary policy from “prudent” to “moderately accommodative”.
