| Actual | Previous | Consensus | Revised | |
|---|---|---|---|---|
| Business Confidence | 95.1 | 95.8 | ||
| Manufacturing Confidence | 88.4 | 87.6 | 88.0 | 87.7 |
| Consumer Confidence | 96.4 | 95.2 | 95.9 |
Highlights
Overall business confidence worsened further in May. At 95.1, the overall sentiment gauge was down from the April's unrevised 95.8 to record its weakest level since last November.
By contrast, confidence in manufacturing (88.4 after 87.7) improved and by more than expected. However, the latest reading was only a 2-month high and still historically very low. Moreover, there were renewed declines in services (97.8 after 99.5), retail trade (102.8 after 102.9) and construction (97.8 after 99.5).
The consumer sector performed rather better but while a 1.2 point increase to 96.4 was stronger than the market consensus, it failed to fully reverse April's 1.3 point decline. The May outturn was also well short of its historic norm.
Taken at face value, today's update is in line with sluggish growth and a particularly weak manufacturing sector. The Italian RPI now stands at minus 10, indicating a very limited degree of underperformance which, with the RPI-P at exactly, zero, can be wholly attributed to surprisingly soft prices.
By contrast, confidence in manufacturing (88.4 after 87.7) improved and by more than expected. However, the latest reading was only a 2-month high and still historically very low. Moreover, there were renewed declines in services (97.8 after 99.5), retail trade (102.8 after 102.9) and construction (97.8 after 99.5).
The consumer sector performed rather better but while a 1.2 point increase to 96.4 was stronger than the market consensus, it failed to fully reverse April's 1.3 point decline. The May outturn was also well short of its historic norm.
Taken at face value, today's update is in line with sluggish growth and a particularly weak manufacturing sector. The Italian RPI now stands at minus 10, indicating a very limited degree of underperformance which, with the RPI-P at exactly, zero, can be wholly attributed to surprisingly soft prices.
Market Consensus Before Announcement
Confidence in manufacturing is expected to edge up from April's 87.6 to 88.0 and in the consumer sector to increase from 95.2 to 95.9.
Definition
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.
Description
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.
