Gas never so expensive, Confindustria’s alarm: “Up to 582 thousand jobs at risk”

If expensive gas were to persist also in 2023, up to 582,000 jobs would be at risk in Italy. This was stated by the Confindustria Study Center (Csc) in the September «Congiuntura Flash», the economic analysis published monthly.
In detail, it is stated, two econometric simulations were conducted for the price of gas, which remains until the end of 2023: in one a price of 235 / mwh (the average value of August) was assumed, in the second of 298 / mwh (the average level expected from futures).
The impact for the Italian economy (compared to a starting point in which the price of gas is held at the average of 99 euros for the first 6 months of 2022) is estimated in a lower GDP growth of 2.2% and of 3.2% cumulative in the two-year period 2022-2023, in the two scenarios, and in 383 thousand and 582 thousand less employed.

Resilience is on the ropes
«The scenario turns downwards. The rise in gas prices since August has spiraled out of control in the wake of cuts in supplies from Russia. The resilience of the industry is on the ropes, after too many months of the impact of expensive energy on the margins of companies: investments will suffer ”, reads the document of the Confindustria Study Center. «The record inflation – he adds – erodes the income of families and threatens consumption, protected (in part and not for much longer) by accumulated savings. The ECB responded to high prices and a weak euro by raising rates, which will give a further recessionary impetus. The prices of various commodities fall, because the world economy is weaker. Italy resists thanks to: more mobility and tourism; (minor) growth in construction. Up to now, the occupation is holding up ».

The fall of industry materializes
As for the industry, “the fall materializes.” The qualitative indicators, it is highlighted, have worsened: in August, the PMI fell even further into negative territory (48.0), signaling a recession; opinions on Istat orders are also down, anticipating lower demand; business confidence declined further, at low levels. Industrial production showed a recovery in July (+ 0.4%), confirming the resilience of Italian companies, with a better dynamic than that of Germany and France; however, it is expected to decrease in the third quarter (-1.4% acquired). In construction, the signs of deceleration continue, after the long phase of expansion: the trend in construction sites already started is seen to decline sharply in the third quarter.

It is urgent to mitigate the price increases for businesses and families
“There is an urgent need to mitigate the energy price increases or their effects. First, with compensatory interventions for families and businesses, which however are very expensive, sustainable for limited periods; Italy is already among the European countries with the largest budget intervention for energy. Regulatory interventions are therefore needed: allocating part of the electricity produced by renewables to businesses, at a fixed and more moderate price; reform the electricity market, uncoupling the price of electricity from that of gas; to impose an EU ceiling on the price of gas in Europe, to act directly on the heart of the crisis ». For the CSC, moreover, «we need to reduce energy dependence on other (more renewable) countries and reduce national consumption of gas and electricity, as we are starting to do. But we must hurry, along all these lines, if we do not want to resign ourselves to stagnation, or worse ».