Short-term economic overview (26 September 2013)

The PMI manufacturing index increased in August in Europe and Italy, over the threshold of 50 to indicate an expanding activity. 

Centro Studi Condindustria forecasted an increase of the Italian GDP starting in the fourth quarter 2013 and revised up its forecasts for 2013, although extremely negative (-1.6% from -1.9% of previous June). 2014 is expected to grow by 0.7% (from 0.5% of June). However wide gaps remained to fill compared to the period before crisis: -9.8% GDP, -27.1% investments, -25.1% industrial production, -7.6% domestic expenditure and -7.2% employment.

The dollar/euro exchange rate has been increasing in the last few days, up to 1.35: 1.3504 on 25/09/13.

In August inflation was again perfectly under control in Europe: it went down to 1.3% in the Euro Area, while it stopped to 1.2% in Italy and to 1.1% in Milan.

The unemployment rate was stable in July at 12.1% in the Euro Area (maximum level), in France (11%) and in Spain (26.3%), while it reduced in Germany (5.3%) and in Italy (12%, where it decreased for the second consecutive month after the pick by 12.2% of May). In the USA the unemployment rate went down to 7.4%, for the first time after four months of almost stability.

Positive signals came from the European manufacturing confidence index¹ that grew also in August, continuing the recovering path started in May, with still increasing orders that carried up also production expectations. Among main economies of the Euro Area, the index grew in Germany (markedly), France, Spain and Italy. According to our preliminary elaborations, the manufacturing confidence index turned to increase also in the area of Milan, thanks to better production expectations for next months.

In the first seven months of 2013 Italian exports were almost in line with the same period of the previous year (+0.2%) as result of different trends between UE (-2.3%) and extra UE (+3.2%) and also between sectors (pharmaceutical, food and other manufacturing the best performer; oil products and metals the worst). In the same period Italian import decreased by 6.0% and so the trade balance was positive by 18.2 billion euro and by over 50 billion excluding energy products.
At regional level, in the first half year of 2013 Lombardy showed exports substantially unvaried compared to 2012 (-3.0% UE; +3.3% extra UE).

In the first eight months of 2013, the total amount of authorized hours of CIG² were substantially stable in Italy (-0.4%), while the increase in the area of Milan (+7.1%) was linked to the growth of Ordinaria component (+37.8%) and Straordinaria one (+47.8%).

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