Short-term economic overview (5 September 2013)

The recovering path of Europe and Italy is confirmed by PMI manufacturing index, growing in August over the threshold of 50 to indicate an expanding activity. 

The OECD has revised its GDP forecasts for 2013: confirmed -1.8% for Italy (unique G7 Country in recession) and +1.6% for Japan; revised up for France (+0.3%), Germany (+0,7%), UK (+1.5%); revised slightly down for USA (+1.7%) and China (+7.4% from +7.8%).

The dollar/euro exchange rate has been decreasing since the beginning of September: 1.3171 on 04/09/2013 (in August it almost reached 1.34).

The commodity trend varies: oil has been appreciating due to the Syrian crisis (Brent to 117.59 dollar for barrel), while other industrial commodities are stable because of some slowing emerging Countries that keep the demand week.

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. On the contrary, in the area of Milan the manufacturing confidence index dwindled slightly in May and in June (last available data), but still remaining on the medium levels of the first half year 2013. The decrease of the indicator was linked to the reduction mainly of domestic orders but also of the foreign ones; whilst production expectations turned to increase again.

Italian exports slowed down also in June (-2.7% over 2012) with similar trends in UE (-2.8%) and extra UE (-2.7%). On the other hand, in the first half year 2013 exports went down by -0.4% with opposite trends between UE (-3.1%) and extra UE (+3.0%) and also within sectors (pharmaceutical, food and other manufacturing products were the best performers while oil and metal products the worst). In the same period, national imports diminished by -7.0%; that’s why the trade balance was positive by 12.3 billion euro and by 40 billion if we exclude energy products.

In July 2013 information about CIG² were not positive in the area of Milan: the total amount of hours grew by 19% over July 2012 (against a decrease by 30% at Italian level). Although the increase relative to July is a new: in the first seven months of 2013 CIG was stable in the Milan Area (+1%, similar to the Italian +1.7%), as result of +39% of CIG Ordinaria, +53.7% of CIG Straordinaria and -66.8% by CIG in Deroga. Last, between January and July the CIGO requested by firms associated to Assolombarda grew less than in the Milan Area (+26.9% vs +39%).

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.