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Roundup: Italy's manufacture, consumer confidence rise, business falls in March

Xinhua, March 30, 2016 Adjust font size:

Italian manufacturing and consumer confidence indexes increased in March 2016, the National Institute of Statistics (ISTAT) said on Tuesday.

The ISTAT monthly survey showed the morale among manufacturing firms slightly rose to 102.2 points from 102 points in February, thanks to improved assessments on order books and inventories.

Production expectations in the sector remained stable.

The manufacturing confidence index reflects the sentiment of some 4,000 Italian firms, and the increase in March was the first one registered since October 2015, according to data.

Despite such improvement, Italy's composite business confidence fell to 100.1 from 103.2 points.

The mixed results on business confidence were difficult to read in the perspective of Italy's still timid economic recovery, yet analysts warned monthly variations of such indexes not always represent significant pointers of growth trends.

"Such data can be seen as positive overall, but must be read with caution," Giuseppe Ragusa, assistant professor of Economics with LUISS University in Rome, told Xinhua.

"Monthly data (on confidence) can be highly variable, whether positive or negative; and such changes, especially when modest, are likely to indicate statistical variations, and are not always reliable signals of a trend," he said.

For example, Italy's gross domestic product (GDP) in 2015 grew in line or below expectations (0.8 percent in volume terms, overall) in 2015, the economist explained.

Yet, the business and consumer confidence indexes had been showing very positive trends at the time, and especially in the second half of 2015, suggesting much better results might be reached.

Italian consumer confidence moved up to 115.0 points in March from 114.5 points in the previous month, ISTAT also stated on Tuesday.

Households' economic expectations, current, and future conditions all posted an increase after dropping in February.

The personal component, which reflects the consumers' assessment on their personal situation, decreased slightly to 105.7 from 105.8.

The consumer confidence had reached a record high in January 2016, reaching 118.6 points, which was taken as a very encouraging signal by the government.

Prime Minister Matteo Renzi's cabinet sees stagnation in the domestic demand as a key factor hampering a full recovery, and has been implementing expansionary measures since 2015 to boost consumer confidence and reignite consumptions.

"The consumer confidence gain posted in March, even if modest, is a good signal considering this perspective, and it is indeed correct to pay attention to the domestic demand in the short-term," Ragusa said. Endit