In early 1990 and again in early 2002, Italy scored its highest readings on this index. But since 2002 confidence has dropped. As the Euro area picked up, Italy’s confidence also recovered but could barely get half-way back to its former peak at the end of 2006 and has since experienced back-sliding. The backsliding continues.

The confidence reading by consumers is only in the bottom third of its range of values since 1990. It has only been weaker in 1992-93, in the previous slowdown in late 2003-2004 and then in a short-lived bout of weakness in 1996. The weakening at this juncture is part of an established trend and so is more worrisome.

The overall situation over the next 12 months assesses out as in the bottom 8 percentile of is range. Unemployment appears more likely to respondents, in the top quarter of its range. Households put their past 12-month and future 12-month household financial situation in the bottom 25 percentile of its range. They say past savings were in the top 10% of their range but see savings prospects ahead in the bottom 10%. The purchase environment is in the bottom 40% of its range but ahead consumers expect it to be in the bottom 16 percentile.

Clearly, Italian consumers are not happy campers. They see many challenges and are having a harder time of it than other large Euro economies such as Germany and France. Italy, it seems, has lot of work to do. There is no longer a lira to depreciate when things get tough.