Global| Oct 28 2014Italian Business Confidence Despite Bounce in October Remains Quite Weak
Summary
Italy's business confidence rose unexpectedly in October. The Index advanced to 96.0 from September's 95.5 and was last higher in July 2014. The index of business confidence stands in the 32nd percentile of its historic rank, meaning [...]
Italy's business confidence rose unexpectedly in October. The Index advanced to 96.0 from September's 95.5 and was last higher in July 2014. The index of business confidence stands in the 32nd percentile of its historic rank, meaning that the index has been lower less than one third of the time. Despite the rebound in October, Italian business confidence remains very low. While the headline shows that the index advanced, the real story is that business confidence in Italy clings to extremely low levels.
Order books in Italy improved to -25 in October from -26 in September. This deeply negative reading stands in the 38.9 percentile of its historic queue, telling us that orders are weaker, less than 40% of the time. Foreign orders registered a reading of -21, the same level as in September. Despite the weak reading, foreign orders stand in the middle of the pack in terms of historic performance. Foreign orders are weaker than this level about 54% of the time. This also tells us that the foreign order reading is above its median because the median on this statistic occurs at the 50% standing.
The inventory reading has been steady at 3 over the last three months and it stands in the 42nd percentile of its historic queue, still below the midpoint of its historic range.
The chart shows us that year-over-year change in confidence has been rising for about the past year but that the change has recently turned to slight declines. Italian confidence dropped sharply three months ago. Despite this month's rise, confidence continues at levels that are substantially weaker than those prior to three months ago. Up to July Italian confidence readings had stood in the 98-99 index level for nine consecutive months. In August the index slipped down to the readings of 95, now 96. Despite the slight rebound in October, it is still in the lower range. We see business confidence in Italy has moved into a lower plateau from August to October. This month's rise has not changed that.
Robert Brusca
AuthorMore in Author Profile »Robert A. Brusca is Chief Economist of Fact and Opinion Economics, a consulting firm he founded in Manhattan. He has been an economist on Wall Street for over 25 years. He has visited central banking and large institutional clients in over 30 countries in his career as an economist. Mr. Brusca was a Divisional Research Chief at the Federal Reserve Bank of NY (Chief of the International Financial markets Division), a Fed Watcher at Irving Trust and Chief Economist at Nikko Securities International. He is widely quoted and appears in various media. Mr. Brusca holds an MA and Ph.D. in economics from Michigan State University and a BA in Economics from the University of Michigan. His research pursues his strong interests in non aligned policy economics as well as international economics. FAO Economics’ research targets investors to assist them in making better investment decisions in stocks, bonds and in a variety of international assets. The company does not manage money and has no conflicts in giving economic advice.
More Economy in Brief
