Rising high risk for the Italian GDP. At the beginning of 2022 the clouds became more dense, already thickening at the end of 2021 on the rise in Italian GDP, estimated to slow down in the 4th quarter. With the current abnormal energy prices, eroded margins, the scarcity of commodities and the increase in infections, the risk is that the GDP will suffer a stop in the 1st quarter: at least -0.8% the impact of the cost- energy on GDP in 2022 (Csc estimates). This is what emerges from the Confindustria Flash situation of January 2022. INDUSTRY – A decline is expected for industry, also driven by the unsustainable cost of energy. According to the Flash economic situation, the scenario for manufacturing began to worsen in December: the PMI fell (62.0 from 62.8), although indicating expansion; orders hold up with difficulty. The unsustainable cost of gas (+ 723% in December compared to the pre-crisis) and electricity in Italy, adding to the price increases of other inputs, is causing temporary closures of companies in the energy-intensive sectors. The impact on industrial production in Italy will be recorded between December and January (after the average + 0.7% in October-November). ENTERPRISES – Investments in Italy slowed down already in the 3rd quarter of 2021 (+ 1.6% from + 2.4% in the 2nd). For the 4th, the opinions of companies on investment conditions collapsed (balance from +24.4 to +6.7), while expectations on economic conditions are falling for the 1st quarter of 2022. This is indicated by the Centro Studi di Confindustria, explaining that both the low margins, eroded by commodities, and the very uncertain context act as a brake, despite the pull exercised by Pnrr and incentives (especially for construction). EMPLOYMENT – Employment increases also in November (+ 64 thousand units): there is therefore no slowdown in the labor market. The number of employees, at a minimum in January 2021, has recovered almost the entire fall (+ 700 thousand; but -144 thousand since the end of 2019). Employees are almost at pre-pandemic levels (-41 thousand permanent, + 79 thousand temporary), while the decline in self-employed continues. INFLATION – In Italy too, inflation has had an unexpected rebound reaching + 3.9%, the highest value since 2008 although it remains the lowest in the Eurozone. The Flash Conjuncture notes that inflation has risen unexpectedly in all advanced economies: at the beginning of 2021 the forecasts were for a modest increase, to + 1.7% in the Eurozone. Instead, in December 2021 it reached more than double values, and up compared to November, a sign that the peak was not touched. The trend in consumer prices in the Eurozone is + 5.0% annually, the highest since 1996 (+ 2.7% the core measure, net of energy and food), while in the US it reached +7, 0% (Cpi index). In Italy, inflation remains lower, + 3.9%, but it is the highest value since 2008. Confindustria analysts note that this increase reflects the anomalous rise in the price of energy, first oil, then gas. Gas and electricity prices contribute more than 0.8 points to Eurozone inflation. In Italy, the jump in the prices of energy goods, + 29.1% annually in December, pushed the general index far above the core one, which remained, at the end of 2021, on a trend similar to 2020 (+ 1.5% ). The impact on household spending of higher energy prices (equal to 8.3% of the consumption basket) is estimated at around 5/6 billion euros: this subtracts resources from spending on other goods and services, slowing down consumption . In the US, where the flare-up came first, the rise in energy prices has weighed less and decreased in recent months: the difference between total and core US inflation is in fact +1.5 points, against +2.4 in Italy. CONSUMPTION – Services and consumption down again. The services PMI fell in December (53.0 from 55.9), a sign that the rise is slowing down. In tourism, the recovery up to November was partial (-25% foreign travel to Italy from 2019) and now the new wave of infections is reducing the mobility of families (-22% in Italy in January 2022). This could curb spending outside the home again, although legal limits remain moderate. The recovery in consumption (gap of -3.6% since the pre-crisis, all in services) risks being interrupted. This is indicated by the flash Conjuncture of the Confindustria Study Center. FOREIGN TRADE – Lights and shadows for Italian exports which in October-November 2021 continued to grow (+ 2.2% in value), supported by extra-EU (+ 2.6%) and intra-EU (+ 1.9%). Germany and the USA, the first two markets, are the ones that contributed most to this performance. The trend is positive even at constant prices (+ 0.6%), but more contained, given the jump in prices (+ 1.7%). But, warns the Confindustria Research Center, the scenario for the beginning of 2022 is very uncertain: alongside a robust recovery in foreign demand, signaled in December by the indicators on manufacturing orders, supply difficulties and pressure on prices remain.
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