IT: Business and Consumer Confidence

Mon Aug 28 03:00:00 CDT 2017

Consensus Actual Previous Revised
Mfg. Conf. Level 108.0 108.1 107.7 107.8
Cons. Conf. Level 106.9 110.8 106.7 106.9
Bus. Conf. Level 107.0 105.5 105.6

Overall business sentiment improved significantly in August according to Istat's latest survey. At 107.0, the composite headline index was up 1.4 points versus a marginally stronger revised July outturn to record its highest reading since June 2007.

However, morale amongst the major sectors was very mixed. On the positive side, manufacturing (108.1 after 107.8) and services (107.0 after 105.1) posted fresh gains but confidence declined in both construction (128.4 after 131.1) and retail (105.3 after 108.8).

That said, consumer sentiment (110.8 after 106.9) was notably more optimistic and matched its best outturn since July 2016. In part this was due to a much brighter outlook but all the main elements of the survey recorded gains. There was even a 4 point jump in expected prices to their second strongest level so far in 2017.

All in all, today's data are quite upbeat and should equate with an improved set of August PMIs, due out around the end of the week.

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 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.