What will happen to Italian industrial production. Report
The protracted conflict and tensions over commodity prices will freeze industrial production. The economic report of the Confindustria study center
The Csc estimates a decline in Italian industrial production in March (-2.0%) , after the statistical rebound in February (+ 4.0%) linked to the fall in December and January. The prices of commodities, in particular that of natural gas (+ 698% on average in April compared to pre-Covid) and Brent (+ 56%), are still high, holding back production activity along all the supply chains. The surveys on entrepreneurial sentiment and the downsized dynamics of orders and business expectations do not suggest significant improvements in the short term.
The CSC rapid survey notes a decline in industrial production of -2.0% in March , after the rebound recorded in February (+ 4.0%), which followed the fall in January (-3.4%) and December (-1%). In the first quarter of 2022, therefore, the CSC estimates a decrease in industrial production of -1.6% compared to the fourth quarter of 2021. The further decrease in production recorded by the CSC in April (-2.5%) brings the variation acquired for the 2nd quarter at -2.5%, compromising the dynamics of Italian GDP in the 2nd quarter, after the decline in the 1st. Orders in volume decreased in March by -0.6% compared to February, in April by -0.4%.
After the positive figure in February, mainly due to a statistical base effect, the factors that hindered Italian production activity even before the war (increases in raw material prices, scarcity of materials) continue to affect , which in the 1st quarter were confirmed very relevant. The perceived insufficiency of implants and / or materials has significantly worsened. The judgments on the main obstacles to exports are still negative. The percentage of manufacturing firms reporting difficulties in terms of higher costs and prices and longer delivery times remained high, albeit down from Q4 2021.
These factors contributed to the contraction in business confidence recorded between March and April (in particular the manufacturing index reached 110.0, the lowest value since May 2021) and to the further decline in the manufacturing PMI (up to 54.5 points, the lowest point since January 2021). To these phenomena was added a significant decrease in the judgments and expectations on orders (both domestic and foreign, the latter in the area of contraction after five consecutive months of expansion) and in the judgments and expectations on the production levels of manufacturing companies, the whose value had not touched such low levels since March last year. The index of expectations on the Italian economy recorded a drop from +0.6 at the beginning of the year to – 34.8 in April, a value comparable to that of December 2020. The worsening of the uncertainty index of economic policy1, which for Italy it rose to 139.1 points in March and then settled on a slightly lower value in April (129.2 points, + 28.5% compared to the 4th quarter of 2021), increases the risks of a further weakening .
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-italiana-report/ on Mon, 09 May 2022 07:47:49 +0000.