Business Confidence Rises to Two-Year High on Growing Optimism on Orders
Italian business confidence advanced to a two-year high in July after the economy returned to growth and exports benefited from the euro’s decline.
The Isae Institute’s manufacturing-sentiment index rose to 98.3, the highest since May 2008, from a revised 96.3 in June, the Rome-based research center said today in an e-mailed statement. The July reading was more than the median forecast of 96.4 in a Bloomberg News survey of 16 economists.
The European single currency has slid 9 percent this year, making Fiat SpA cars and Luxottica Group SpA sunglasses cheaper for U.S. consumers. Italian industrial production rose in May and optimism among households grew for the first time in three months in July as the economic outlook brightened.
“There was a clear improvement in demand,” Isae said in the statement. A sub-index measuring expectations on orders rose to 13 from 11 and another one measuring sentiment about the economic situation rose to minus 11 from minus 13.
Luxottica said this week net income climbed 30 percent in the second quarter while Fiat reported its first profit in three quarters in the period. Both companies said their earnings were helped by a stronger U.S. dollar against the euro.
On July 15, the Bank of Italy raised its 2010 growth forecast for Europe’s fourth-biggest economy to 1 percent from a previous estimate of 0.7 percent, citing export gains. Still, it may take time for the economy and business to recover. Italy’s jobless rate climbed to a seven-year high of 8.4 percent in the first quarter.
Isae conducted its survey of 4,000 companies between July 1 and July 19. Isae initially reported a reading of 96.1 in June.
To contact the reporter on this story: Flavia Krause-Jackson in Rome at fjackson@bloomberg.net
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