Italian business confidence declined to a two-year low in December after a strike by lorry driver disrupted production and as manufacturers brace themselves for the likelihood of slower growth. The Isae Institute's business confidence index fell to 91.8 from a revised 92.1 in November, the Rome-based research center reported today. That is the lowest since December 2005, when the index reached 91.5.
A sub-index measuring manufacturers' expectations for production in the next three months fell to 11, the lowest since July 2005.
``The short-term production outlook probably is being hurt by the declining forecasts regarding the international growth cycle,'' Isae said.
The Organization for Economic Cooperation and Development predicted on Dec. 6 that eurozone growth will slow to 1.9 percent next year from 2.6 percent in 2007. The OECD has also cut its forecast for 2008 U.S. growth to 2 percent from 2.5 percent. Non of these predictions may turn out to be accurate, but they are all pointing in the same direction.
Growth in Italy, which is Europe's fourth-biggest economy, has lagged behind the Eurozone average for the last 11 years, and will continue to do so for at least the next two, according to the European Commission in a Nov. 9 forecast.
Confindustria, Italy's largest employers' lobby, on Dec. 14 also cut its forecast for the Italy's economic growth next year to 1 percent, almost half the rate predicted for 2007.
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Edward Hugh is only able to update this blog from time to time, but he does run a lively Twitter account with plenty of Italy related comment. He also maintains a collection of constantly updated Italy economy charts together with short text updates on a Storify dedicated page Italy - Lost in Stagnation?