Consumer Confidence and Industrial Turnover in Italy Experience Declines

29 Oct, 2023

Consumer Confidence and Industrial Turnover in Italy Experience Declines

Italy's economic resilience showed signs of faltering on Friday, as recent data revealed a deterioration in both business and consumer confidence, along with a decline in industrial turnover. According to the Italian National Institute of Statistics (ISTAT), both business and consumer confidence took a hit in October, with the most significant decline observed among individuals and households.

Consumer confidence in October dropped to 101.6 points from its previous value of 105.4, reaching its lowest point since January. In the case of business confidence, there was a smaller decline, with a drop from 104.9 points to 103.9 points, marking the lowest business confidence level recorded since April 2021. Both indices are based on a 100-point baseline from 2010, adjusted based on responses to the monthly ISTAT survey. Business and consumer confidence are crucial leading indicators for gauging economic performance.

Additionally, ISTAT reported that the seasonally adjusted index of industrial turnover in August witnessed a year-on-year decrease of 5 percent, with contractions observed in both domestic and foreign markets. Industrial turnover also decreased by 0.4 percent compared to the previous month, in July.

Next week, ISTAT is expected to release third-quarter economic growth data. In the second quarter (Q2), Italy's gross domestic product (GDP) contracted by 0.4 percent. These developments had a somewhat negative impact on Italian markets, as evidenced by a 0.6 percent decline in the blue-chip index on the Italian Stock Exchange in Milan. Furthermore, Italy's ten-year government bond yield saw a slight decrease, ending the week at 4.81 percent.