ROME (ITALPRESS) – According to a survey conducted by the Bank of Italy between Nov. 20 and Dec. 12, 2024 among Italian firms in industry and non-financial services with at least 50 employees, judgments on the general economic situation worsened in the fourth quarter of the year.In firms’ assessments, demand weakened, particularly demand from abroad and demand aimed at the services sector. The outlook on their own short-term operating conditions is unfavorable overall; this is impacted by economic-political uncertainty and, to a lesser extent, by fears about the development of energy commodity prices and, especially among exporting firms, about policies about international trade.Firms foresee an expansion of investment in the first half of 2025, although they continue to consider conditions for investing unfavorable. Credit access conditions are assessed to be unchanged, and the overall liquidity position is still considered satisfactory. Most firms expect to keep their workforce unchanged.Sales price growth has stabilized at moderate levels in services and industry in the narrow sense; in construction it has declined, but remains stronger than in other sectors.According to Bankitalia’s findings, list price dynamics would remain broadly stable in all sectors over the next 12 months, amid expectations of moderate wage increases. Businesses’ expectations of consumer inflation decreased over all time horizons.In the fourth quarter of 2024, judgments about the country’s general economic situation worsened again: the percentage of businesses expressing negative assessments rose to 30 percent, up from 21 in the previous survey, compared with substantial stability in the share of those who saw an improvement (5 percent from 6). The deterioration in judgments was widespread across all sectors.Evaluations of demand trends, which had already become slightly negative overall in the summer, weakened further at the end of last year, due to more cautious judgments by service firms and the widespread worsening of those on foreign demand. Among firms in the narrow sense of industry, indications of reduced sales continued to prevail over those of growth, to an extent almost similar to the previous survey (the balance between the respective responses stands at -16 percentage points), with a significant decline in foreign sales (the balance falls to -11 from -5). By contrast, demand continued to grow in construction, more than in the previous quarter (23 percentage points from 19), supported again by firms in the residential sector.For the first quarter of 2025, slightly less than half of firms in the narrow industry and construction sectors expect sales to remain essentially stable; among firms in services, expectations of unchanged demand rise to 56 percent of the total. The share of those expecting expansion is about 30 percent in both industry and services, but rises to 43 percent in construction, where more than half of firms expect to benefit in 2025 from measures related to the National Recovery and Resilience Plan (NRP).Businesses’ expectations of their own operating conditions in the next three months deteriorated further in industry in the strict sense and in services, where the balance between improvement and worsening expectations fell to -16 and -5 percentage points, respectively; they also became less favorable in construction, where, however, the balance remains slightly positive (2 percentage points). The outlook is weighed down by economic-political uncertainty and, to a lesser extent, by fears about the trend in energy commodity prices and, especially among exporting firms, policies about international trade and investment.
– Photo Agency Photogram –
(ITALPRESS).
