Italy consumer confidence rebounds, business confidence grows
June’s reading in Italy mainly reflected better future expectations. It was strongly affected by a sharp improvement in consumers’ expectations on the future general economic situation, which hit a near one-and-a-half-year high, and in their expectations on their future personal economic situation, which reached an over 15-year high.
Moreover, consumers’ willingness to buy big-ticket items and their unemployment expectations improved.
On the other hand, consumers’ assessments of the current general economic situation in Italy and of their personal economic situation continued to worsen, although to a much lesser extent than in May.
The results of the survey suggest that consumer sentiment was strongly and positively influenced by the formation of the new government — which put an end to three months of political stalemate — and by the first measures adopted by the government to strengthen control on migrant arrivals.
FocusEconomics Consensus Forecast panelists expect private consumption to expand 1.0% in 2018, which is unchanged from last month’s forecast. For 2019, panelists see private consumption growing 0.9%.
Business confidence grows for the first time in four months in June
The National Institute of Statistics (Istat)’s composite business confidence indicator (Clima di Fiducia delle Imprese Italiane, IESE)—which covers the manufacturing, construction, services and retail sectors—rose to 105.4 points in June, above May’s revised 104.6 points (previously reported: 104.7).
June’s strengthening came on the back of an improvement in sentiment in the retail trade and market services sectors.
Confidence in the retail trade sector improved on better expectations on future sales and improved assessments of current sales.
In the market services sector both assessments and expectations on order books improved, too.
On the other hand, sentiment in the manufacturing sector deteriorated on poorer assessments on order books and production expectations. Moreover, confidence in the construction sector weakened somewhat as less favorable assessments of order books and production plans more than offset improved employment expectations.
FocusEconomics panelists expect fixed investment to increase 2.5% in 2018, which is unchanged from last month’s forecast. For 2019, panelists see fixed investment growing 2.2%. ■