There is light at the end of the tunnel. Italy begins «the long narrow path of recovery»: the first positive signs are registered in services and the industry is showing solidity. The analysis is contained in Confindustria’s Flash Conjuncture, according to which GDP is “on the right track”. May, say the viale dell’Astronomia technicians, “Italy was confirmed as the month of the gradual relaxation of anti-Covid restrictions, also thanks to the significant pace of vaccinations. This makes it possible in the second quarter a first, small, increase in GDP, which will be followed by a strong rebound in the third and fourth of more than + 4%, which will be consolidated thanks to the impact that will come from the investments financed by the European Next generation plan. Eu «.
Austria ahead
Industrial production remained stable in March (-0.1%), worse than expected, closing the first quarter at + 0.9%. The statistical drag in the second quarter is nil and in April it is estimated that it will remain stable (despite the Pmi which rose to 60.7), but a positive change is expected in the quarter: production expectations are sharply increasing and inventories are rapidly increasing. decumulation; this indicates a demand beyond forecasts and a necessary accumulation of stock, which will support production. Services sector
After the PMI fell to 47.3 in April, the expected recovery in demand should begin to materialize in May, shifting consumption back to services, hitherto conditioned by anti-contagion measures. The increase in demand for services, which is expected to accentuate in the summer quarter, is explained by the recovery in travel and consumption outside the home, as well as by the reopening in sectors linked to the tourism and culture chain (museums, art galleries).
Job creation
The data on mandatory communications show a slow recovery of the labor market in Italy. Between January and April, around 130 thousand job positions were created, net of terminations, against a very negative figure (-230 thousand) in the same months of 2020 (+ 260 thousand in 2019). –
Investment data
The investment prospects are clearly improving. The leasing sector in the first 4 months of 2021 recorded growth compared to 2020 (Assilea data); cars and capital goods have the best performances, the real estate sector has started to grow again. Good indications also from the rise in internal orders from producers of investment goods (from -10.8 in March, to -0.5 in May). Loans to businesses slowed down in March, but remained on the rise (+ 5.7% annually). – Export in salute
Italian exports restarted in March (+ 2.6% at constant prices; + 1.1% in the first quarter), returning to pre-crisis levels. Sales in EU countries drove the rise; weaker those from outside the EU, which however rebounded in April (+ 7.3% in value). Foreign sales of intermediate and consumer goods are on the rise, while non-EU sales of investment goods are on the rise in April. The prices of various imported production inputs are on the rise. The outlook is good, also given the gradual reopening in Europe and the USA, confirmed by the further improvement in foreign manufacturing orders in May.
Inflation still low
Consistent with the weakness of demand, the trend in consumer prices in Italy remains low: it rose to + 1.1% per annum in April, from negative values at the end of 2020. We are well below the ECB target of 2.0% (+ 1.6% inflation in the Eurozone). The rise in prices in Italy was driven by the rise in energy prices (+ 9.8%), which however is transitory, given the stabilization of Brent at pre-crisis levels. The dynamics of the final prices of industrial goods, on the other hand, remain very moderate (+ 0.3% per annum). And core inflation, including the prices of services, is very low (+ 0.5%). Even if the expected resumption of consumption and the Next generation Eu plan will create more room for price increases, Confindustria argues, we are far from an inflationary scenario.