(Finance) – In the second quarter, firms’ assessments on the general economic situation remain unfavorable overall. There is “a general deterioration in valuations in industry in the strict sense, against a resilience in services and a slight improvement in construction”. Expectations on demand, including foreign demand, have weakened in the coming months. Although investment conditions are deemed “unfavourable”, companies anticipate an expansion in investment in 2023 and the 3-month employment outlook remains positive. This is the picture drawn byBank of Italy survey on inflation and growth expectations.
Among the different sectors, the employment prospects are more favorable for companies with at least a thousand employees and for those located in the centre, in the services and construction sectors. The expectations about its operating conditions for the next three months they worsened for companies in industry in the strict sense, against expectations of an improvement in services and construction. THE major brakes on growth prospects continue to be economic and political uncertainty and, “albeit to a much lesser extent than in 2022, the trend in oil prices”.
“The share of businesses that considers the conditions for accessing credit unchanged – reads the survey – increased to 78.4 from 76.6 in the previous quarter, mainly reflecting the decline in the share of those who consider them to be deteriorating. The overall liquidity position in the following three months continues to be considered at least sufficient by just over 90% of companies”.
The consumer inflation expectations they decreased over all time horizons, reaching 5.8% over 12 months and 5.0 and 4.5% over time horizons over 2 years and between 3 and 5 years respectively. “The dynamics of the prices charged by businesses – notes Bankitalia – would remain sustained in the next 12 months, albeit decreasing overall”.
Compared to a year earlier, i sales prices were revised upwards by 6.9% on average in industry in the strict sense (it was 7.6% in the previous survey), 5% in services (up from 4.3%) and 5.9% in construction (up from 6.4%). In the expectations of companies, the growth in selling prices would ease over the next 12 months in industry in the strict sense and in construction (to 1.9 from 2.8 and to 5.2 from 5.5, respectively) and would remain almost stable in services (to 3 from 2.9). “Raw material prices are expected to continue to push sales prices up, albeit to a lesser extent than in the previous quarter. The higher cost of labor and intermediate inputs would also contribute to price increases”, explains the survey. Moreover, in the second quarter the share of companies that encountered difficulties related to the prices of energy goods decreased slightly (to 47 from 52 per cent in the first) and “substantially halved” compared to the previous survey, from 39 at 20, the share of companies that believes that energy prices will influence prices charged upwards in the next three months.
Faced with a rate which, despite the slowdown, would still be far from the European Central Bank’s target of 2% in 2028, the president of Confindustria, Carlo Bonomi, he returned to attacking the ECB’s German-style policy at the meeting of UCIMA, the association of packaging machinery manufacturers. “We still don’t understand this constant rush to fight inflation with interest rates. At a time when we need to support investments, the rush to raise rates is especially harmful with a policy of announcements,” he said Bonomi.