|Mfg. Conf. Level||102.1||103.0||101.9||102.1|
|Cons. Conf. Level||109.0||108.7||108.6|
|Bus. Conf. Level||102.4||101.0||101.2|
Overall business sentiment improved slightly this month according to the new Istat survey. At 102.4, the headline indicator was 1.2 points above its marginally firmer revised September reading and at its highest level since July.
The upswing reflected a pick-up in morale in most of the major subsectors. Services (106.6 after 103.7) led the way ahead of manufacturing (103.0 after 102.1) and construction (125.8 after 125.3). Only retail (101.3 after 102.0) posted a deterioration. However, both manufacturing and services remained below their respective mid-year peaks.
Meantime, consumer confidence slipped from 108.6 to 108.0, its lowest reading since July last year and its third decline in as many months. Ominously too, following their bounce in September, household inflation expectations fell quite sharply and retraced almost all of that month's rise.
Overall the October results are mixed. Economic growth may be accelerating but if so, only slowly, and weakening consumer confidence hardly bodes well for any meaningful near-term recovery in household demand.
The Italian statistics office (Istat) conducts business and consumer confidence surveys over the first fifteen and ten working days of each reference month respectively. These 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 sectorâ€™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.