Italy business confidence rises in July, consumer morale slips

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Morale amongst Italian businesses rose in July for a second month running, pulling clear of the lows triggered by the coronavirus lockdown, but consumer confidence dipped slighty, data showed on Friday.

National statistics institute ISTAT’s manufacturing confidence index climbed to 85.2 in July from an upwardly revised 80.2 in June, against a median forecast of 85.5 in a Reuters survey of seven analysts.

The June figure was previously given as 79.8.

ISTAT’s composite business morale index, combining surveys of the manufacturing, retail, construction and services sectors, climbed to 76.7 from a an upwardly revised 66.2, still far below where it was before the pandemic struck in February. The June figure was previously given as 65.4.

“Growth, spread across all sectors, was most pronounced for services. However, the levels reached by the indices remain historically low with the exception of construction, where the index has returned to the historically high levels seen at the beginning of 2018,” ISTAT said.

While business morale rose as the government announced multi-billion-euro stimulus packages, consumer confidence this month dipped to 100.0 from 100.7 in June, lower than a median forecast of 103.8 in the Reuters’ poll. The June figure was previously put at 100.6.

ISTAT said the fall was caused by concern over the worsening economic climate and fears for future prospects.

Surveys released in Germany and France on Thursday showed both consumer and business confidence growing in the two countries as coronavirus lockdowns were eased and infection numbers dropped.

More than 35,000 people have died of the coronavirus in Italy since its outbreak emerged on Feb. 21, the fifth largest toll in the world after those of the United States, Brazil, Britain and Mexico.

The euro zone’s third largest economy shrank 5.3% in the first quarter from the previous three months, the steepest decline since the current series began in 1995.

Italy’s official forecast is for a full-year drop in gross domestic product of 8% this year, though Economy Minister Roberto Gualtieri has said this will probably have to be revised lower. The Bank of Italy has forecast negative growth of -9.5% and the International Monetary Fund -12.8%

Preliminary second quarter 2020 GDP data is due to be released on July 31.

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