|Bus. Conf. Level||94.9||91.6|
|Mfg. Conf. Level||99.1||97.1||97.6|
|Cons. Conf. Level||110.9||104.0||104.4|
Overall business sentiment climbed sharply this month according to the new Istat survey. At 94.9, the headline composite indicator was 3.3 points above its January reading to register easily its strongest mark in the last three years.
The upturn reflected gains in morale in all of the major output sectors bar construction. Hence, manufacturing was up 1.5 points at 99.1, its best reading since June 2014, services gained more than 5 points to 100.4 and retail was up almost 6 points at 105.3. However, construction dropped 0.8 points to 76.6. Nonetheless, today's results bode well for next week's February PMI surveys.
At the same time, consumer confidence also improved significantly. At 110.9, the index rose some 6.5 points from its level at the start of 2015 and was more 13 points above its print a year ago. This should bode well for upcoming retail sales but, following a decent bounce in January, the buying intentions index dropped 7 points to minus 74, just 5 points above its lowly 2014 average. The drop here may reflect another decline in inflation expectations (minus 33 after minus 31) and warns that increased optimism might not equate with a much needed upturn in actual spending.
Istat's business and consumer confidence surveys are conducted over the first fifteen and ten working days of each reference month respectively and provide information about current and expected developments in key sector variables. The largely qualitative results are synthesized for each survey into a single number that provides an overall measure of sentiment. Business confidence reflects the combined results of separate surveys covering manufacturing, retail, construction and services.
If investors want to know how the business or consumer sectors are performing as they evaluate their investment decisions, they can find timely and in depth information in the latest Istat surveys. Although short-term swings can be erratic, changes in trends in confidence can contain very useful information about a sector's underlying health well in advance of the release of the official data. Moreover, by including some forward-looking components (e.g. manufacturing orders or consumer buying intentions) the Istat surveys can also provide a potential insight into prospective developments.
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