Istat: order ratings worsen in manufacturing sector



Consumer and business confidence deteriorates. This is the picture captured by Istat's report referring to October 2023: for consumers, the index rises from 105,4 to 101,6; for businesses, the composite index of confidence falls from 104,9 to 103,9. Consumers' perception is one of widespread deterioration on both personal and general economic situations. In fact, the four indicators calculated monthly from the same components mark negative dynamics: the economic climate and future climate show the largest declines (the former goes from 115,2 to 110,5 and the latter from 113,2 to 107,7); current climate falls from 100.2 to 97.4 while personal climate drops from 102,2 to 98,6.


With reference to businesses, manufacturing and services are also estimated to see a decrease in the confidence index. Bucking the trend is construction, the only sector improving (from 160.9 to 163.8). In more detail, the index falls in manufacturing from 96.4 to 96.0 compared to September (it was 100 last June); in market services and retail trade, the decline is more pronounced with the index falling from 100.5 to 98.1 and from 107.1 to 106, respectively. As for the components of the confidence indexes, in manufacturing, judgments on orders worsen (-21.2 in October compared with -19.4 in September and -13.2 in July) while expectations on production grow and inventories are judged to be slightly decumulating.


According to quarterly capacity questions to manufacturing firms, capacity utilization declined in the third quarter of 2023. Given the period from Q1 2018 onward, the degree percentage, already declining in 2019, plummeted in Q2 2020 as a result of the health emergency. Then the gradual recovery, with particularly high levels of utilization between the second half of 2021 and the first half of 2022: in the first quarter of 2022 the indicator rose to 78.9 percent, a value that had not been touched since the fourth quarter of 2000. Since the second half of 2022 there has been a slow descent, culminating in a more pronounced deterioration in the middle quarters of this year, when the utilization level fell to 76.8 percent in July 2023 and 75.9 percent in October.

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