THE “STRONG REBOUND” OF THE DEAD CAT. Because Gualtieri sells us the skins of a bear that will devour him
This week the Minister of Economy Gualtieri, garrulous European spokesman in Rome, in the face of the results of the direct tax revenues of self-employed workers, based on 2019 incomes, made the wheel and went on to praise the fact that he expects a "Strong rebound" in the third quarter. Today he corrected the game a little by stating that he expects a GDP at -8% at the end of the year, but he continues to talk about this wonderful rebound, needless to say thanks to him, which will save Italy and maybe make him and Conte the heroes of Homeland.
Too bad it will not be, indeed it will simply be the exact opposite. The reason is simple and obvious. The crisis has hit the service sector strongly and has not yet stopped hitting it, while the mild recovery that we see is essentially in the manufacturing sector. We see this trend well considering the PMI Markit forecast indices of the two sectors.
Let's start by looking at the Manufacture's PMI Markit forecast indices:
Let's see how in August the value is actually well above 50, which indicates expansion, so we can expect a satisfactory result from this sector.
But let's move on to see that of services:
In the services sector, which includes personal services, a rebound in July slightly above 50, indicating expansion follows a declining August. Yet August, at least for the government, had to be an exceptional month also for tourism and related sectors: there was talk of "Sold out", but, evidently, this was either apparent, or ephemeral, or in any case it was not able to provide sufficient guarantees to operators, who therefore see a decline in the sector itself.
Too bad that the bulk of employment in Italy, as in any advanced economy, is created by the service sector….
from 2008 to 2020 the weight of services on total employment went from just over 66% to over 70%. The problem is that the services, especially the more basic ones, such as those for the person, catering or tourism, are labor intensive, that is, they require a lot of personnel, while the manufacturing production processes employ much less personnel.
Exactly as they are noticing in the US, the return to a greater weight of manufacturing on services is not without problems, but it leads to the cancellation of a large number of jobs, even if GDP is potentially unchanged.
So even when, absurdly, there is a manufacturing boom, not exactly simple since the dollar has devalued and domestic consumption has contracted anyway, the contraction of the services sector is such that there will certainly be a strong expulsion of personnel. as soon as the layoffs are released. Moreover, the decline in tourism seems to be in the medium term, so much so that many airlines have permanently cut their flights.
This is why Gualtieri, speaking of rebounds and recovery, is sowing false illusions, while in reality he does not exactly do anything to avoid the crisis that is already among us, indeed, with his fiscal rigidity, dictated by Brussels, we are sure he still does more damage. Also for this reason the bear skin of the recovery that Gualtieri is selling is a great evil, and the bear of the crisis lko will go in search, followed by millions of disillusioned and frankly angry Italians.
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The article THE "STRONG REBOUND" OF THE DEAD CAT. Why Gualtieri sells us the skins of a bear that will devour him comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/il-forte-rimbalzo-del-gatto-morto-perche-gualtieri-ci-vende-pelli-di-un-orso-che-lo-divorera/ on Thu, 03 Sep 2020 19:57:08 +0000.