Short-term economic overview (17 April 2013)

The European debt crisis has been going on for three years. During the last year relevant progresses have been made, resulting in a general spread decrease; but the recovery is still sluggish as the increasing Italian spread has shown (however lower than July 2012 peaks) due to the political uncertainty after February election.

In 2012 global growth was steady (+3.2% world GDP) but with three speeds: quickly growing Emerging Countries (+5.1%), accelerating the USA (+2.2%) and slowing down Europe (-0.6%).

The whole decrease (-0.6%) of the Area Euro GDP in 2012 was divided among Countries exposed to debt crisis that were decreasing a lot (Italy included, -2.4%) and continental Economies stranded or slightly increasing (Germany +0.7% and France +0%). According to forecasts, the Italian GDP will shrink also in 2013 (-1.5%) and it will restart growing in 2014 (+0.5%).

The euro/dollar exchange rate has been around 1.30 since the end of February.

During this global economic crisis, Italy has been able to keep its share of global trade, better than France and Germany: Italy -0.7% between 2007 and 2012 (share of global trade at 2.7% in 2012), France -0.9% (3.1% the 2012 share) and Germany -1.7% (7.7% the 2012 share). On the other hand, China gained +2.5% (11.2% the 2012 share) and the USA +0.3% (8.4% the 2012 share).

Industrial raw material prices in euro were steady in March for the second month in a row. Brent Oil price went down in March to 106$ barrel (116$ the February average) and now it is under 100$ barrel (99$ on 16/04/2013).

European inflation has been showing a decreasing trend since Fall 2012; in March the rate was 1.7% in the Euro Area and 1.6% both in Italy and in Milan.

The European unemployment rate was still high in February (12.0%), while it kept decreasing in the USA (7.7%). Among the principal European Countries, the unemployment rate grew in France (10.8%) and in Spain (26.3%), while it went down in Italy (11.6%) and it was stable in Germany (5.4%).

In March the manufacturing confidence index¹ stopped in the Euro Area after four consecutive months of growth (decreasing orders, increasing inventories and stable production expectations). The index slowed down also in Germany, France and Spain, while it was substantially static in Italy. In line with the European trend, in February the manufacturing confidence index in the area of Milan started a new decrease, zeroed out the January recovery and went back to December 2012 levels. Foreign orders dropped (but the forecasts of demand and production in the short term were still positive), inventories of end products went down and production diminished.

Distinguishing the Italian GDP drop (-2.4%) in 2012, the export was the only growing component (+2.3%), but it didn’t compensate the domestic demand that plummeted (-4.3% the household demand, -8,0% investments, -2.9% public spending). The rate public debt/GDP reached 127%.

In 2012 the Italian manufacturing turnover went down (-4.3%) and the gap compared to 2008 spread (-9.8%), but the firms active on foreign markets exploited the recovery: in 2012 +3.6% the manufacturing exports, on a much higher level than 2008 (+6.4%).

In March the total amount of authorized hours of CIG² grew compared to February both in the area of Milan than in Italy; the growth is common to all kinds of CIG, but it is particularly high for CIG Straordinaria in the Area of Milan (+56%) and for CIG in Deroga at national level (+147%). Relative to CIG Ordinaria, compared to February 2013 the total amount of hours increased by 5.0% in the area of Milan and in Italy, while it decreased by 21% for the Assolombarda companies.

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.