Short-term economic overview (16 January 2013)

2013 has got a fragile heritage from 2012, with the global production in stagnation until October. In the last months of 2012 the performances between Countries seemed to diverge again: the developed Countries still contracting and the emerging Countries recovering.

Thanks to the agreement in the Usa to avoid the fiscal cliff, financial markets have shown positive results: FitseMib is on the maximum level since mid-2011 and S&P500 since end-2007. Also spreads with Germany have taken advantage from this situation: ten-year BTP/Bund went to 270bp and Bonos/Bund to 355bp.

The €/$ exchange rate has been steadily over 1.30 since mid-December. Now the rate is over 1.33 (it closed at 1.3327 on 15/01/2013).

According to Confindustria raw material prices in euro went down by 2.6% in December compared to November. On the contrary Prometeia noticed stable prices for the manufacturing commodities. Oil average quotation is steady over 110$ barrel (112.49$ on 15/01/2013).

In December inflation was stable at 2.2% in the Euro Area, descending to 2.3% in Italy and rising to 2.0% in Milan. The average value in 2012 was 2.5% in the Euro Area, 3% in Italy (the maximum increase since 2008) and 2.6% in Milan.

The unemployment rate hit a new negative record to 11.8% in December. The rate remained stable in Germany (5.4%) and Italy (11.1%), it grew again in France (to 10.5%) and in Spain (to 26.6%), while it decreased (to 7.8%) in the Usa.

In December the manufacturing confidence index¹ grew in the Euro Area for the second consecutive month, after a continuing drop between March and October. The increase of the indicator was due to a recovery of the orders and of the production expectations for the following 3-4 months. In detail, the index augmented one more time in Germany, Italy and Spain, while it started to descend again in France. In the Milan Area the manufacturing confidence index increased slightly in November (last available data) because of an improvement in the production expectations and a reduction of the stock of finished products (now under normal levels), while internal orders contracted again.

In November the Italian industrial production went down by -1% monthly and by -7.6% yearly. Confindustria has forecast a bounce by 0.4% in December over November while according to Prometeia the contraction will last also at the beginning of 2013.

Bank loans to firms decreased also in November (-3.4% yearly, the worst data of the last 3 years). It’s a 7-month decreasing trend: May -0.4%, June -1.5%, July -1%, August -1.9%, September -3.2%, October -2.9%.

In December the total amount of authorized hours of CIG² diminished both in Italy (-20% compared to November) and in the Milan Area (-34%). In 2012 compared to 2011, CIG increased by 12% in Italy, while it decreased by 6% in the Milan Area. In Italy, CIG Ordinaria grew more than CIG in Deroga (+46% vs +11%), whilst CIG Straordinaria declined slightly (-5%). The annual drop by 6% in the Milan Area was due to the reduction of CIG Straordinaria (-21%) that overcompensated both the increase of CIG Ordinaria (+12%) and that of CIG in Deroga (+8%).

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).

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