|Mfg. Conf. Level||103.6||105.9||104.2||104.4|
|Cons. Conf. Level||112.1||116.9||112.7||113.0|
|Bus. Conf. Level||107.5||106.2||106.1|
Overall business sentiment improved in October. At 107.5, Istat's composite confidence index climbed 1.4 points from a minimally weaker revised level at the end of the third quarter to register easily its highest mark so far in 2015. This was its second successive monthly increase and suggests that companies are finally becoming more confident about recovery prospects for the Italian economy.
Within overall business confidence, manufacturing sentiment weighed in at 105.9, stronger than expected and usefully above the previous month's firmer revised 104.4 print. The improvement here was mainly a reflection of gains in orders and expected production. There were also increases in services (113.1 from 112.2) and, in particular, retail (116.6 from 109.2). The only decline was in the volatile construction sector although even here a 3.5 point drop to 119.8 failed to reverse in full September's sizeable bounce.
Consumer confidence was unexpectedly strong. At 116.9, the index was nearly 4 points above its upwardly revised September reading and at its highest level since February 2002. Almost all the major components posted gains including the buying intentions measure which climbed 3 points to minus 45. However, inflation expectations for the year ahead declined from minus 18 to minus 23,their weakest outturn since March.
Nonetheless, in general today's results are surprisingly upbeat and should make for upside potential to next week's October PMI surveys. Italian GDP is still well below its post-recession high but at long last the indications are that a durable recovery may be falling into place.
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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