Italian business confidence rose this month as executives grew optimistic about the outlook for the euro region’s second-biggest economy after the country’s recession eased in the third quarter.
The manufacturing-sentiment index increased to 88.5 from a revised 87.8 in October, Rome-based national statistics institute Istat said today. Economists had predicted a November reading of 88, according to the median of 15 estimates in a Bloomberg News survey.
Italy’s economy shrank less than economists forecast in the quarter through September as the country’s fourth recession since 2001 entered its second year. Still, as export growth fails to offset weak domestic demand, the contraction is deepening and a “very negative context” marks the final quarter of the year, business lobby Confindustria said in a report yesterday.
Italy entered the recession in the fourth quarter of 2011 as the global slowdown aggravated the effects of waning productivity and tax increases and public spending cuts passed by Prime Minister Mario Monti’s government to contain the euro-region’s second-biggest debt. The Italian economy will shrink 2.2 percent this year and 1 percent next, the Organization for Economic Cooperation and Development said in its latest Economic Outlook report on Nov. 28.
Industrial output declined the most in five months in September amid declining orders and sales. Car sales in Italy fell 12 percent in October. Consumer confidence fell in November to the lowest since records began in 1996 amid rising pessimism among households on the outlook for growth and jobs.
Separately, Istat said today that the institute’s economic sentiment indicator fell to 76.4, the lowest since March 2009, from a revised 77.1 in October as executives of the service businesses were more pessimistic than manufacturers about the economic outlook. Istat originally reported an economic sentiment reading of 76.6 in October.
Istat originally reported a business confidence reading of 87.6 in October.
-- With assistance from Giovanni Salzano in Rome. Editors: Andrew Davis, Jerrold Colten