Consumer and business confidence in Italy is worsening. For companies it is the third consecutive decline. This occurs in a context of producer prices that show signs of recovery on a monthly basis, but remain weak on an annual basis, especially due to the energy sector. Producer prices are one of the main indicators of inflation and therefore need to be monitored.
According to Istat data for November, the consumer confidence index fell from 97.4 to 96.6, with a marked decline in opinions on the general economic situation and future prospects. The weakness of confidence appears closely linked to concerns about the labor market and spending opportunities, reflecting a perception of economic vulnerability. The data show a contraction in the economic climate (from 99.7 to 97.8) and in the future climate (from 95.0 to 93.8). Less pronounced, but still significant, was the decline in personal climate (from 96.6 to 96.2) and current climate (from 99.2 to 98.7).
On the business front, the general index reduced from 93.4 to 93.1, reaching the lowest level since April 2021. Manufacturing recorded a slight improvement (from 85.8 to 86.5), driven by an improvement in opinions on orders, even if production expectations remain negative. On the contrary, the construction and market services sectors see a clear deterioration: for construction, the index drops from 103.9 to 101.5, while in services it drops from 95.2 to 93.7. The only positive exception is represented by retail trade, where the index rises from 103.8 to 106.7, thanks to better expectations and judgments on sales.
As regards producer prices, there are conflicting signals between monthly recovery and annual declines. In October there was a growth of 0.7% compared to September, with a +1.0% on the domestic market, but they remained down 2.8% compared to October 2023. This dynamic is mainly influenced by the energy sector , which marks a large annual decline (-10.1% for the supply of electricity and gas), only partially balanced by the monthly increase. Excluding energy, prices recorded a slight annual growth of 0.2%, interrupting a negative streak that began over a year ago. Among manufacturing activities, marked declines are observed in the sectors of refined petroleum products (-14.0%) and metallurgy (-3.0%), while sectors such as food and beverages (+1.2%) and electronic products (+0.9%) mark annual increases. In the construction sector, prices remain stable for residential and non-residential buildings, but show a slight increase for roads and railways, although remaining lower compared to 2023.
The combination of a decline in confidence and a still uncertain dynamic in producer prices highlights a fragile economic picture for Italy. On the one hand, the positive trend in retail trade and non-energy prices suggests that some sectors are finding opportunities for recovery. On the other hand, the decline in services and construction, combined with widespread pessimism among consumers, fuels uncertainty about future prospects.
