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Confindustria: rise blocked, risk of a new fall
Confindustria highlights the “risk of a new decline”, a “second recession” for Italy and the fourth quarter GDP is expected to “fall again”. The Viale dell’Astronomia study center indicates this with the monthly report “Congiuntura flash” that highlights the critical problems: “Services are getting worse”, but also the industry sees a “halted recovery”. Domestic demand is “fragile” and “with the second wave of the pandemic, a new stop is expected at the end of 2020” for world trade. And there is alarm about a “unemployment in employment”: Confindustria economists point out that “employment stabilized again in September, after a temporary increase in July-August. Unemployment seems to point to the decline again, as in March -April, due to the contraction of the workforce. The fourth quarter also promises to be negative for employment “.
The CSC speaks of a “second recession”, explaining that “recent restrictive measures to curb the epidemic lead us to estimate that in the fourth quarter there will be a drop in GDP again. The impact on the Italian economy should be limited compared to the collapse of the first. in the second (-17.8%), given that many productive sectors remain open. “The new expected contraction of GDP in the last three months of 2020” occurs immediately after the strong rebound in the third quarter (+ 16.1%), which had returned activity to -4.5% from pre-Covid levels. “In this context,” services are getting worse. The Public Ministry of Services indicates a new decline already in October (46 , 7 from 48.8), with weak demand. After the partial recovery of the tourism sector until August, at the end of the year in various segments the losses will continue to be close to 70% (estimates by Federturismo) “.
In the industry, “vice versa, the pmki for October (53.8) still gave positive signals. However, production as early as September-October saw its rapid recovery stop at pre-Covid levels: this could herald a further moderate decline in the fourth quarter. “In short, via dell’Astronomia economists see a” halted recovery “for industry. Domestic demand is” fragile. “” Domestic orders from producers of consumer goods amounted to -28.3 (-34.4 in the third quarter), those of producers of capital goods to -31.4 (from -42.8). However, household confidence is declining, with a sharp drop in expectations about the economy: this fuels the propensity to save. ”In companies there is also“ more debt for Liquidity. In September, the dynamics of credit to companies accelerated even more (+ 6.8% annually, from -1.0% in January), to compensate for the lack of liquidity. Loans with public guarantees exceeded 110 thousand million in November (Working Group data) .This will weigh over and bank debt (from 16.5% to 18.9% of liabilities, estimates of the CsC) and on financial charges, reducing resources for investments ”.
Exports are “on the rise”, with a recovery that “affected all the main types of goods and, at different rates, the main markets. The signs at the beginning of the fourth quarter were positive: foreign manufacturing orders on the rise. However – warns the CsC – the chances of a new fall at the end of the year are high, due to the pandemic, especially in tourism-related items ”. The “stable rates” with “the sovereign rate in Italy remained low (average of 0.66% for the 10-year BTP in November), despite some volatility. Even Germany’s differential remained at the low values of October (+ 1.23%) ”, and it is“ good news, compared to the jump in March, when Italy was perceived as riskier. Meanwhile, on the global stage, oil is “on the rise”, “the eurozone is slowing down”, the growth of the United States is “down”, there is evidence of a “growing Brazil”; “Encouraging signs also for Chinese and Indian manufactures”, “Russian industry, on the other hand, is contracting, suffering from still low oil prices.”
