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Economy in Brief

Italy Industrial Orders Gain as Euro Softens
by Carol Stone June 18, 2004

Exchange rates matter. The latest data on Italian industry orders indicate that trends in orders from foreign customers and in the value of the euro tend to shift more or less at the same time. In our graph of year-on-year percent changes, the euro exchange rate slowed its rate of gain (inverted in the chart) at almost the same time that foreign orders turned toward a slower rate of decline. These orders are now rising rapidly and the exchange rate has fallen outright, although it remains higher than a year ago (and has stabilized over the last few weeks).

Domestic orders at Italian industry have also picked up somewhat since early last year, but not nearly as vigorously as foreign orders. In fact, in the latest month, April, domestic orders were barely above those in April 2003, although other recent months have seen stronger comparisons. Even so, while April's domestic orders stand 6.9% above their low last May, foreign orders are 11.4% above their low in March 2003.

Renewed growth in total orders over the past year has been spread across a number of industries. Textiles, wood products, furniture, metals and precision equipment are all rising. Specialized fibers and machinery are mixed and leather and paper are still weak.

Annual Average
Index 2000=100 Apr 2004 Mar 2004 Feb 2004 Yr/Yr % Change
2003 2002 2001
Total Orders 99.6 98.5 99.2 3.4 94.9 99.0 97.0
Domestic 97.8 98.7 98.0 0.1 93.5 97.4 96.6
Foreign 103.7 98.1 101.9 11.3 98.1 102.6 97.7
Memo: Euro ($/€) 1.1989 1.2261 1.2640 10.4 1.1317 0.9453 0.8955
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