Italy Business Confidence Rises to Two-Year High on Growth Hopes
Italian business confidence rose to the highest in two years, a sign of optimism that the euro region’s third-biggest economy will emerge from a recession by the end of 2013.
The manufacturing-sentiment index climbed in September to 96.6 from a revised 93.4 in August, the Rome-based national statistics office Istat said today. That was the highest reading since August 2011. Economists predicted 93.4, according to the median of 14 estimates in a Bloomberg survey. The index is based on a poll of about 4,000 businesses.
Business executives and households grew optimistic this month that the economy may soon exit its two-year slump, the longest since World War II. Consumer confidence rose to the highest since June 2011 as Italians’ sentiment about their employment expectations and the current economic situation increased, Istat said earlier this week.The government forecasts that the economy will return to growth next quarter and continue to expand in 2014.
Still, industrial production unexpectedly fell in July, contrasting with signs of optimism in recent surveys.
Istat initially reported the business confidence index at 92.9 for August. The survey was taken in the first half of the month, before the resurgence of political uncertainty on the survival of Prime Minister Enrico Letta’s coalition government.
With the political parties that support Letta bickering over the fate of former premier Silvio Berlusconi, the government may find it difficult to implement measures to lighten the tax burden on households and businesses including the cancellation for 2013 of an unpopular property levy on main residences.
The Italian Senate is considering Berlusconi’s possible expulsion from the chamber because of his tax-fraud conviction.
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