Confindustria confirms mini recovery at the end of the year with some shadows

Confindustria confirms mini recovery at the end of the year

(Finance) – Lhe Italian economy is set to close 2024 with a slight recoverysupported by the food sector serviceswhile the industry confirms a series of difficulties. This was revealed by the latest economic report of Confindustria Study Centerrecalling that Italian GDP stopped in the 3rd quarter and that, in the 4th quarterthe economy is estimated at slight restartdriven by the tertiary sector and by rate cuts, which can begin to facilitate consumption and investments. Exports remain negative due to the weakness of the Eurozone and the uncertain global scenario.

Go ahead with the rate cuts. There FED in November he decided on second cut of US rates (by -0.25, to 4.75%), after the first in September. There ECB already has cut three times European rates (still -0.25, at 3.25%). Both come together halfway December for the last session of 2024: the markets expect another quarter of a point of cuts in the two areas, as well as the continuation of the easing in 2025 (by a further point the ECB).

Inflation still high in the Eurozone: In October it was at +2%, on the ECB threshold; energy is still falling (-4.6% per year), food is rising (+2.9%), among core prices (+2.7%) those of services are hot (+3.9% ), those of cold industrial goods (+0.5%). In Italy the trends are similarbut more moderate (+0.1% for industrials): the result is one point lower inflation: +0.9% total, +1.7% core.

More expensive gas, less oil. In October-November the price of gas in Europe it reached 40 euros/mwha leap of +57% from 26 euros in February: this has an upward impact on electricity prices paid by Italian families and businesses. Conversely, the price of petrolium is more moderate compared to the peaks of the first part of 2024 (85-90 dollars per barrel), continuing to fluctuate between 74 and 76 dollars from September to November.

Services are growing. In the 3rd quarter the services were the only growing sectorthanks to foreign tourism (+6.7% annual spending in August). Construction in decline. Production in the construction sector fell in August (-1.8%) and has fallen by -4.6% since the peak at the beginning of the year.

Weak investments. The assessments on the conditions for investing worsened in the 3rd quarter (the balance -7.7) and the assessments on orders for capital goods fell in October (-25), anticipating a weak trend in investments in plant and machinery. The cost of credit for businesses falls (-0.69% from the highs).

Weak consumption: in the 3rd trimester the car sales have dropped by -6.6% (and -0.8% in October), those of other goods grew little (+0.4%). Furthermore, family confidence fell in October to low values ​​compared to 2018-2019, so the propensity to save could remain high. Low inflation and the declining cost of credit (-0.28% from the peak) have a positive effect.

Exports still decreasing: nIn the 3rd quarter, Italian exports fell further (-0.6% at constant prices), while imports showed a first weak recovery (+0.9%) after 2 quarters of contraction. The weakness of the Eurozone and Germany weighs heavilyas world trade continues to grow (+0.7% in July-August over the 2nd quarter).

Even in the Eurozone, GDP does well, not industry. There production industrial is decreasing throughout the area: in the 3rd quarter there was a clear contraction in Germany (-1.9%), more than in Italy, and Spain also fell (-0.4%); France bucked the trend (+0.5%). The progress of GDP still denotes one growth of the Area in the 3rd (+0.4%), driven by services: healthy France (+0.4%), Spain (+0.8%) which continues to be the most lively economy, Germany’s contribution is modest ( +0.2%) after a 2nd drop.

Industry is also doing badly in the USA. The GDP American grew up +0.7% in the 3rd quarter, thanks to the contribution of private consumption (+0.6%) and public spending (+0.2%), which offset the weakness of investments (+0.1%) and the decline in net exports (-0.1%). There production industrial, however, has closed declining the quarter (-0.3%); in October, the PMI and the Chicago index (47.4 from 35.4) confirmed their recessionary values. Since the outcome of the US elections, the dollar has appreciated (1.05, from 1.09).

In China, on the other hand, industry and exports are doing well. Chinese manufacturing is still in an expansionary phase, albeit at a limited pace. Production is supported by foreign demand: in October exports recorded a monthly +12.7%, the highest growth in two years; Trump’s election could induce a strong expansion in the coming months, to anticipate the possible introduction of tariff barriers from 2025. However, it remains domestic demand is weak and disappointment prevails with the delay in recovery policies: the Government has announced 1,400 billion dollars over 5 years, but mostly intended to repay the debt of local authorities.

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