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Economy in Brief

Biz Confidence Sinks Further in Italy
by Robert Brusca March 26, 2008

Italy’s Business confidence gauge from ISAE edged lower in March to 89 from 89.6 in February. The pace of its decline, however, seems to have slowed (see the blue line in accompanying chart). Overall confidence is not in terrible shape as it stands in the 72nd percentile of its range of values going back to 1991. But it has weakened and is weaker than it was.

Still, Italy shows the same malaise as most other European countries. It is the consumer sector that is weakest. The industry order gauge for consumer goods stands in the 15th percentile of its range, the weakest of all sectors. Intermediate goods orders are in the 43rd percentile of their range and capital goods orders are in the 57th percentile of their range. For all of industrial the sector order gauge stands in the 31st percentile of its range.

For most sectors domestic and foreign orders are about the same in percentile terms. But for consumer goods, foreign orders are in the 31st percentile of their range compared to a 13 percentile standing for domestic orders. The consumer goods production gauge is also the weakest among sectors standing in the 19th percentile compared to 51st percentile for capital goods and a 31st percentile reading for intermediate goods.

In Italy capital goods are holding up while the consumer sector is under pressure led by weakness at home. While Italy’s business gauge has continued to drop the good news is that the pace of that drop has slowed.

Italy ISAE Business Sentiment
          Since January 1999
  Mar
08
Feb
08
Jan
08
Dec
07
%tile Rank Max Min Range Mean
Biz Confidence 89 89.6 91.2 91.8 39.9 72 102 81 21 91
TOTAL INDUSTRY
Order books & Demand
Total -16 -13 -8 -5 31.0 67 13 -29 42 -11
Domestic -16 -16 -15 -9 35.7 61 11 -31 42 -13
Foreign -17 -17 -11 -6 36.4 52 11 -33 44 -14
Inventories 3 5 5 6 58.3 80 13 -11 24 4
Production -11 -13 -12 -4 32.7 60 22 -27 49 -6
INTERMEDIATE
Order books & Demand
Total -17 -14 -13 -13 34.5 66 19 -36 55 -12
Domestic -16 -14 -17 -15 39.6 58 16 -37 53 -14
Foreign -19 -21 -13 -13 37.3 65 18 -41 59 -13
Inventories 4 4 3 6 65.5 29 14 -15 29 0
Production -13 -13 -14 -11 31.0 63 27 -31 58 -8
INVESTMENT GOODS
Order books & Demand
Total 1 -4 1 4 57.5 34 32 -41 73 -7
Domestic -6 -8 -5 0 54.4 34 25 -43 68 -12
Foreign 0 -8 -1 2 58.9 35 23 -33 56 -8
Inventories 0 6 4 3 45.9 62 20 -17 37 2
Production 3 -4 -1 6 51.5 34 35 -31 66 -2
CONSUMER GOODS
Order books & Demand
Total -22 -23 -18 -5 15.9 89 15 -29 44 -10
Domestic -23 -24 -21 -8 13.9 89 8 -28 36 -12
Foreign -20 -18 -24 -11 31.9 66 12 -35 47 -15
Inventories 3 6 6 5 53.8 66 15 -11 26 3
Production -18 -20 -17 -2 19.4 89 11 -25 36 -7
Total number of months: 118
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