What will happen to industrial production. Confindustria report
Italian industrial activity is estimated to decline in May (-1.4%), after retreating in April. In the second quarter of 2022 there would thus be a contraction already acquired of -0.6% in industrial production, due in particular to the rise in energy costs and supply difficulties. The economic report of the Confindustria study center
Italian industrial activity is estimated to decline in May (-1.4%), after retreating in April.
In the second quarter of 2022 there would thus be a contraction already acquired of -0.6% in industrial production, due in particular to the rise in energy costs and supply difficulties, exacerbated by Russian military operations in Ukraine. The qualitative surveys (ISTAT and IHS-Markit) continue to highlight fears regarding the persistence of the factors that slow down the production activity of companies.
The CSC quick survey reports a -1.4% decline in industrial production in May, after falling -1% in April. In the second quarter of 2022, therefore, the acquired change in industrial production would be -0.6% compared to the first quarter, which had already recorded a decrease of -0.9% compared to the previous quarter. The further decline estimated for May, added to the drop in orders, in April of -0.3% and in May of -0.1%, compromises expectations for the 2nd quarter.
The unchanged level in March surprised because all the qualitative indicators, and the CSC survey itself, suggested a fall, which would have pushed to confirm the negative dynamics of GDP in the first quarter.
The negative phase of industrial production is expected to continue in the 2nd quarter: industrial activities, although in a differentiated manner by sector, are in fact affected by the succession of energy prices and, consequently, by the persistent rise in production costs. This contributes to making the trend of industrial production extremely volatile.
The indications from the various surveys in recent months return a negative picture. The deterioration in the confidence climate of manufacturing firms (from 109.9 to 109.3 in May, down for the 6th consecutive month) and the worsening of opinions on orders and production levels (gradually decreasing respectively from December and January) negatively affect the production activity of companies and their future expectations.
In fact, the percentages of companies that consider the insufficiency of plants and / or materials to be the main obstacle to production remain high, combined with the scarcity of skilled labor and now also financial constraints (values returned almost to the levels of the 2nd quarter 2020 ) also due to the widely announced ECB rate hike. The pessimism of entrepreneurs is accompanied by the sharp slowdown in the manufacturing PMI in May (from 54.5 to 51.9).
The prolongation of the phase of uncertainty due to the conflict contributes to making the conditions of the Italian industry still extremely weak and highly sensitive to the volatility of the economic trends that characterize the current international economic context.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/che-cosa-succedera-alla-produzione-industriale-report-confindustria/ on Sat, 04 Jun 2022 08:23:34 +0000.