The consumer confidence index fell in August to 96.1 from 98.9 in July, signalling growing pessimism in the Italian economy. All components contributed to this decline: economic climate, personal sentiment, current conditions, and future expectations all dropped, reflecting broader uncertainty.

In contrast, the business confidence climate improved slightly from 94.3 to 94.7. Within this indicator, market services saw the most notable rise, driven by increased satisfaction with current business activity and order books. This sector's confidence surged from 96.0 to 97.9, buoyed by improved assessments of current conditions and modest optimism about future orders.

However, the manufacturing and construction sectors painted a mixed picture. Manufacturing confidence fell from 87.6 to 87.1, with worsening expectations for production and a rise in perceived stock levels. Construction confidence also slightly declined, from 103.6 to 103.3, due to less favourable future employment expectations, although order book assessments improved. In addition, retail trade confidence decreased from 102.6 to 101.4, as current business activity was viewed less positively, despite improved future sales expectations and higher inventory levels.

In essence, the report highlights a nuanced economic landscape: consumer sentiment is weakening, while certain business sectors, especially services, show signs of resilience and cautious optimism.

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.