employment is up, industrial production is down – Corriere.it

In the first quarter of 2023, based on the preliminary estimate, the Italian GDP recorded a higher increase than that of France and Germany and the euro area as a whole. Istat recalls this in the monthly note on the trend of the Italian economy. The note also records that in March, “the good conditions of the Italian labor market were confirmed with employment still growing (+0.1%, equal to +22,000 units)” and an employment rate that stabilized to 60.9% compared to February, while it increased by 1.8 percentage points compared to the 2019 average, remaining, however, still lower than that of the euro area average (69.6% in the fourth quarter of 2022).

Consumer confidence on the rise

Istat then underlines the trend towards improvement in consumer confidence which continues in April «driven by the positive assessments of the general and current economic situation» and a slight increase in business confidence which «summarizes heterogeneous signals among the various components». Among the data reported, the seasonally adjusted index of industrial production which marked a negative cyclical change in March for the third consecutive month.

Inflation slows, confidence improves but output falls

The first signs of a slowdown in the inflation trend and the easing of the financial turmoil prompted the main central banks to continue the process of raising rates but at a more moderate pace, reports Istat again. In the first quarter, GDP showed a higher increase than in the Euro Area, but industrial production recorded a widespread decline in March, as mentioned, for the third consecutive month. Employment continued to show a positive trend in March. In April, the improvement trend in consumer confidence was confirmed, driven by positive assessments of the general and current economic situation; business confidence also showed a slight increase, with heterogeneous signals from the various components.

March data on industrial production

At the same time, Istat released the monthly data for March on industrial production. March sees the third consecutive decline in industrial production, with a 0.6% reduction in the seasonally adjusted index compared to February, according to Istat data. Compared to the previous year there is a decrease of 3.2% and also the first quarter shows a «slight decrease», by 0.1%, compared to the previous three months. Almost all the main sectors of activity decreased both on a monthly basis and in annual terms with the exception of capital goods. There is “a large drop in energy compared to the previous year” (-11.2%). Among the growing sectors of economic activity, the manufacture of means of transport stands out (+12.4% year on year).

The leap in car production

The Italian production of motor vehicles recorded a growth of 17.4% in March, on a monthly basis and of 35.8% on an annual basis, in the data adjusted for the calendar. This is the largest trend increase recorded by Istat for the sector for almost two years, starting from June 2021, in the midst of the post-pandemic recovery when there was a leap, compared to June 2020, of 39.1% . The first quarter as a whole also expanded by 2.2% compared to the previous period. Also in general, the manufacture of means of transport is the sector of economic activity with the highest growth trend in March.