The recovery of the Italian economy continues “fast” but contagions and commodities remain “the factors of uncertainty”. This was underlined by the Confindustria Study Center in the flash economy of September, underlining that «2021, however, could close with a recovery close to + 6%. After the strong rebound in the second quarter (+ 2.7%) – explains the Csc – in the third quarter the main indicators are holding up, despite the effects of the scarcity of some raw materials and semi-finished products and the resumption of infections. Much uncertainty remains for the fourth quarter, linked to the continuation of the epidemic ».
Also because there was a summer recovery, but “we are still far below the pre-Covid values and the confidence of service companies lost very little in August. The recovery of the sector should continue in the third quarter, given the increasing opinions on business, but with some shadows for the fourth quarter, given the marked decline in expectations on orders in August ».
In this scenario, therefore, the industry is slowly giving way to services in driving growth: “The SME indices show a slowdown in industry in the last three months (60.9 in August from 62.3 in May) and a acceleration in services (58.0 from 53.1). This happens, in part, because the scarcity of some production inputs, which had already been worrying for some months, is starting to weigh on Italy too. Industrial production grew in the second quarter a little less than the first (+ 1.2% vs + 1.5%) and the third quarter started at a slower pace: in July there was a + 0.8% and the change acquired for the quarter is + 0.9%; then in August the expectations on production and orders fell ».
Consumption
Consumption is “in strong recovery” dragged, in the second quarter, by spending on services and “expectations for the third quarter are for a further rise: about half of the extra savings accumulated by households during the lockdown remains to be spent, which in Spring, the Confindustria Study Center had estimated at 26 billion. In August, domestic orders from consumer goods producers almost returned to pre-crisis levels and household confidence held up. Investments, in the meantime, continue their robust dynamics, after a + 2.4% in the spring which took them far beyond the pre-crisis values, with orders on an upward trend ».
Inflation
“In recent months, inflation has also risen in Italy (+ 2.1% annually in August). In large part this derives from the increase in energy prices (+ 19.8%), in the wake of the rise in oil prices in recent months ». However, the price trend “excluding energy and food is low (+ 0.6%), indicating that domestic pressures are moderate”. The ECB, Confindustria continues, “continues to keep in place the hyper-expansionary measures, thanks to which rates remain low: the BTP is at 0.71% in September, the spread with the Bund still at +107”.
Job
Employment in Italy is recovering, especially as regards fixed-term work: “In July, the temporary employees estimated by Istat were almost 100,000 more than in January 2020. On the other hand, the temporary component of employment is always the most reactive to the economic cycle, both falling (-352 thousand units in May 2020) and recovering (+136 thousand units until October 2020, substantially flat in the following months, when activity was again sluggish, and then surged from March 2021 in parallel with the rebound in GDP) “.
Basically, according to Confindustria, “part of the permanent employment remains ‘frozen’. The blocking of layoffs for economic reasons, introduced at the outbreak of the health emergency, was in fact only partially offset by a simultaneous decrease in activations (hiring and transformations), so that in May 2021 the active permanent relationships were 275,000 more (cumulative balance between monthly activations and terminations from January 2020). The distance between the two curves indicates, in particular, the extensive use of layoffs, which is incorporated in the Istat data and which, on the other hand, does not affect the employment relationships counted by the INPS, which remain active even if frozen “.