Net deterioration in confidence in most sectors of the Italian economy. In our opinion, says Paolo Pizzoli, Senior Economist at ING, a contraction in GDP could just be avoided in the third quarter, but it is almost inevitable in the fourth.
Confidence in the manufacturing sector fell for a third consecutive month, recording the lowest level since February 2021, due to weakening demand for consumer and intermediate goods, where orders fell for the third consecutive month. Production expectations declined markedly across all sectors, indicating a further deterioration in the industry’s supply-side thrust in the fourth quarter of 2022. Construction was the only sector to record a monthly gain, recovering partially the ground lost in August. The impact of generous tax incentives on construction is clearly still at stake, and firms’ rising employment expectations appear to reflect confidence in maintaining favorable conditions.
Today’s publication appears to mark a pause in service sector developments. After stabilizing over the summer, confidence in the services sector declined sharply in September, reaching its lowest level since February 2022. This affected all subsectors, suggesting that the reopening effect, favored by the revival of tourist flows, is fading.