Italy business outlook improves sharply in second quarter, survey shows


Italy business outlook improves sharply in second quarter, survey shows

By Gavin Jones

ROME (Reuters) – Italy’s business outlook improved more sharply than that of any other country in the four months to June, according to a global survey released on Monday which offers signs of hope for the country’s struggling economy.

The survey, conducted three times a year by IHS Markit, showed Italy’s business confidence at a one-year high, with optimism regarding future activity, employment and capital expenditure all rising from the previous survey in February.

The euro zone’s third largest economy eked out growth of 0.1% in the first quarter, emerging from a shallow recession in the second half of last year, and national statistics bureau ISTAT has warned the second quarter may see another contraction.

However, the IHS Market survey showed the net balance of companies forecasting an increase in activity in the coming 12 months at +29%, up from +23% in February and the highest since June 2018.

“This improvement since the opening quarter is the greatest among all the countries for which comparable data are available,” said IHS Markit, which surveyed some 12,000 businesses in 17 major countries and regions between June 12-25.

The improvement in confidence in Italy was broad-based. Manufacturers’ net activity balance of +28 was the highest since February 2018, while service providers posted a balance of +30, which was a one-year high.

Service companies cited expectations of improved internal demand, more public investment and better utilisation of technology as reasons for confidence, while manufacturers expected a recovery in foreign demand and a lower tax burden.

READ  How the problem of private parking charges has arisen — and how you can avoid being a victim

Conversely, political instability and an increasing global trend towards trade protectionism were reported by both manufacturers and services as the main threats to the outlook.

While the Italian economy has been broadly stagnant since the second quarter of 2018, a recent plunge in borrowing costs may improve credit conditions and sentiment.

Italian bond yields fell this month to their lowest since 2016, thanks to a deal with the European Commission, which averted a clash over Italy’s public finances, and to expectations that the ECB will retain its ultra-dovish stance under its incoming president, Christine Lagarde.

The labour market has also showed signs of improvement. The jobless rate fell to a 7-year low of 9.9% in May, as some 67,000 jobs were created, while the overall employment rate rose to 59%, its highest level on record.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

READ  Thomas Cook seeks to borrow £400m to stave off cash crunch





READ SOURCE

LEAVE A REPLY

Please enter your comment!
Please enter your name here