Italian business confidence down on sustained recession
ITALIAN business confidence plummeted to a near three-year low in May, official data showed yesterday, as the country continued to struggle through recession, reforms and spending cuts.
Istat’s manufacturing confidence index dropped from 89.1 in April to 86.2 in May, its lowest since August 2009.
Employment expectations worsened further, from minus 13 to minus 19, while the assessment of order books remained almost unchanged, up from minus 46 to minus 45.
Meanwhile confidence in the construction sector fell from 83.7 in April to 81.8 in May, and the services sector index dropped from 75.8 to 72.7.
“I think business and consumer confidence will keep falling because people have been talking about fiscal austerity since Monti arrived, but the main impact is going to be felt from now on,” said Barclays economist Fabio Fois.
Fois said hikes in property tax will only take effect in June, while an increase in value added tax has been pencilled in for October, further eating into Italians’ dwindling purchasing power.