|Mfg. Conf. Level||108.0||106.9||107.9||107.7|
|Cons. Conf. Level||107.3||105.4||107.5||107.4|
|Bus. Conf. Level||106.2||107.4||106.8|
Istat's latest business survey found a slight deterioration in sentiment this month. At 106.2, the overall confidence indicator was down 0.6 points versus its weaker revised April reading although this still equalled its second highest level since December 2007.
Morale in manufacturing dropped 0.8 points to 106.9, its first decline since last November. The setback largely reflected weaker orders and a downward revision to production expectations. Elsewhere, the news was mixed with minor gains in optimism in construction (128.1 after 128.0) and retail (111.1 after 110.8) contrasting with a sizeable slide in services (105.5 after 107.2).
Meantime, consumer confidence dropped a full 2 points to 105.4, its lowest outturn since January 2015. Ominously, all of the component indicators were down from their respective April marks. However, at least buying intentions were only marginally softer and inflation expectations edged a few notches higher having fallen quite sharply last month.
Overall the May results are disappointing and make for some downside risk to this month's PMIs. Unlike most Eurozone members, the Italian economic recovery is still struggling to achieve any real momentum.
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.