Short-term economic overview (11 December 2013)

Analyse and comment the international, the national and the area of Milan scenario.

In the Euro Area the manufacturing confidence index grew in November for the seventh consecutive month, reaching the highest levels since autumn 2011. Among main countries, the index kept going up in Germany (whose increasing trend started in July) and in Italy, while it decreased slightly in France. In particular, in Italy the recovery was linked to better production and order expectations for the following months. In the area of Milan the manufacturing confidence index went up in October, on the highest levels since mid-2011, thanks to a strong increase of production expectations and orders, mainly foreign, while inventories of end products grew slightly (but still under normal levels).

• The Italian economy is continuing on its path to recovery but 2013 will close negative: GDP -1.8% in Italy and -1.2% in Lombardy. In 2014 GDP will grow slowly: +0.7% at national level and +1.3% in Lombardy, where recovery is expected stronger than in the other Italian regions (according to Prometeia forecasts).

• In the area of Milan, 31% of firms expect to close 2013 with an higher turnover compared to 2012, 32% stable and 37% slower. Compared to six months ago, the budget of firms is much better: in April 53% of respondents expected a decrease of turnover for 2013, now this percentage is 37%. The improvement continues in 2014: 50% of firms in the area of Milan forecast an increase of their turnover.

• In the first nine months of 2013 exports were substantially unvaried over 2012 (-0.1%) in Lombardy, slightly decreasing in Italy (-0.3%) and descending in the area of Milan (-1.8%; manly to European countries).

• In the first ten months of 2013, the total amount of authorized hours of CIG grew by 16% in the area of Milan compared to 2012, while in Italy they were unvaried. Relative to October, Cig Ordinaria and Cig Straordinaria increased (+18% and +33% over September), while Cig in Deroga decreased (-53%). On the contrary, Cig Ordinaria hours of Assolombarda companies fall by 46% in October compared to September.

• The economic outlook for the Usa and Euro Area diverges: among July and September +2,8% the annual growth in the Usa, +0,4% in the Euro Area.

• The dollar/euro exchange rate went down during first weeks of November (1,342 on 13/11/13), than it increased again between the end of November and the beginning of December (1,376 on 10/12/13).

• According to Confindustria, raw material prices went down by -2.9% in October over September, due to a decrease by -4.1% of energy products; according to Prometeia, Italian industrial sectors haven’t still feel benefits. Oil Brent price is on 109,5$ barrel (10/12/13), in line with the average of October 2013 (109$).

• In November inflation grew to 0.9% in the Euro Area and in Milan to 1%, while it decreased in Italy to 0.7%.

• The unemployment rate descended in October in the Euro Area (from 12.2% to 12.1%), while it increased in the Usa (from 7.2% to 7.3%). Unemployment was stable to 5.2% in Germany and to 12.5% in Italy, while it went down to 10.9% in France and increased to 26.7% in Spain.

In the Euro Area the manufacturing confidence index¹ grew in November for the seventh consecutive month, reaching the highest levels since autumn 2011. Among main countries, the index kept going up in Germany (whose increasing trend started in July) and in Italy, while it decreased slightly in France. In particular, in Italy the recovery was linked to better production and order expectations for the following months. In the area of Milan the manufacturing confidence index went up in October, on the highest levels since mid-2011, thanks to a strong increase of production expectations and orders, mainly foreign, while inventories of end products grew slightly (but still under normal levels).

The Italian economy is continuing on its path to recovery but 2013 will close negative: GDP -1.8% in Italy and -1.2% in Lombardy. In 2014 GDP will grow slowly: +0.7% at national level and +1.3% in Lombardy, where recovery is expected stronger than in the other Italian regions (according to Prometeia forecasts).

In the area of Milan, 31% of firms expect to close 2013 with an higher turnover compared to 2012, 32% stable and 37% slower. Compared to six months ago, the budget of firms is much better: in April 53% of respondents expected a decrease of turnover for 2013, now this percentage is 37%. The improvement continues in 2014: 50% of firms in the area of Milan forecast an increase of their turnover.

In the first nine months of 2013 exports were substantially unvaried over 2012 (-0.1%) in Lombardy, slightly decreasing in Italy (-0.3%) and descending in the area of Milan (-1.8%; manly to European countries).

In the first ten months of 2013, the total amount of authorized hours of CIG² grew by 16% in the area of Milan compared to 2012, while in Italy they were unvaried. Relative to October, Cig Ordinaria and Cig Straordinaria increased (+18% and +33% over September), while Cig in Deroga decreased (-53%). On the contrary, Cig Ordinaria hours of Assolombarda companies fall by 46% in October compared to September.

The economic outlook for the Usa and Euro Area diverges: among July and September +2,8% the annual growth in the Usa, +0,4% in the Euro Area.

The dollar/euro exchange rate went down during first weeks of November (1,342 on 13/11/13), than it increased again between the end of November and the beginning of December (1,376 on 10/12/13).

According to Confindustria, raw material prices went down by -2.9% in October over September, due to a decrease by -4.1% of energy products; according to Prometeia, Italian industrial sectors haven’t still feel benefits. Oil Brent price is on 109,5$ barrel (10/12/13), in line with the average of October 2013 (109$).

In November inflation grew to 0.9% in the Euro Area and in Milan to 1%, while it decreased in Italy to 0.7%.

The unemployment rate descended in October in the Euro Area (from 12.2% to 12.1%), while it increased in the Usa (from 7.2% to 7.3%). Unemployment was stable to 5.2% in Germany and to 12.5% in Italy, while it went down to 10.9% in France and increased to 26.7% in Spain.

Footnotes

1 Data referred to European countries are extracted from the monthly survey on manufacturing sector harmonized by the European Commission. Assolombarda carries out an analogous survey interviewing 350 associated companies every month. The manufacturing confidence index is the main indicator of these surveys and is calculated as the mathematical average of the seasonally adjusted data on production expectations, orders and stock of finished products (with inverted sign).

2 Cassa Integrazione Guadagni (CIG) is a particular Italian shock absorber. It is a redundancy fund which helps companies to keep labour force in times of economic difficulties. It allows workers to receive a part of their wages. There are three kinds of CIG: Ordinary (Cassa Integrazione Ordinaria - CIGO), Extraordinary (Cassa Integrazione Straordinaria - CIGS) and Special (Cassa Integrazione in Deroga - CIG in Deroga).

Contact us

For further information please contact the Research Department tel. +390258370.409, e-mail stud@assolombarda.it.

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