IT: Business and Consumer Confidence

Wed Sep 27 03:00:00 CDT 2017

Consensus Actual Previous Revised
Mfg. Conf. Level 108.1 110.4 108.1 108.5
Cons. Conf. Level 110.8 115.5 110.8 111.2
Bus. Conf. Level 108.0 107.0 107.1

Business confidence improved again in September according to the new Istat survey. At 108.0, the overall sentiment index was up nearly a full point versus its marginally firmer revised August mark and at a new multi-year peak.

Sentiment was more bullish in most of the major sectors. In particular, manufacturing (110.4 after 108.5) posted its best reading since August 2007 and there were gains too in construction (132.1 after 128.4) and retail (108.8 after 105.3). Services (107.0) were unchanged.

The relative buoyancy of the mood in industry was matched in the household sector where confidence jumped more than 4 points to 115.5, its strongest print since January 2016. Moreover, the survey results here showed a significant (albeit much needed) bounce in buying intentions as well as another sizeable rise in inflation expectations.

Today's findings are very promising and should be reflected in a strong September manufacturing PMI next week. The apparent recovery in the consumer sector is especially welcome but this will need to be sustained if the economic upswing is to gather 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 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.