GDP, Csc: strong rebound in the second quarter but risks from increased contagion
Confindustria: “Italy distributed in a robust way, rebound in consumption”. Excellent June (“thanks to the acceleration of vaccinations and fewer restrictions”), strong rebound in GDP in the 2nd quarter of 2021, less in the third and fourth. In July “the increase in infections in various parts of Europe poses new risks of cooling economic activity, especially in tourism and in particular from August, both through the channel of trust and through any new anti-Covid measures”.
Confindustria, Csc: The risk of a slowdown from an increase in infections in July
The Italian economy, driven by consumption and services, is experiencing a “robust” recovery but is seeing growing uncertainty about the prospects. This was highlighted by the Confindustria Study Center in the July Flash Conjuncture. “The scenario that is consolidating for Italy is of a strong rebound in GDP in the 2nd quarter of 2021, less so in the 3rd and 4th quarter”, explains the CSC.
GDP: CONFINDUSTRIA, MORE ROBUST RECOVERY IN JUNE BUT UNCERTAINTY CONTAGIES REMAINS
The data confirm the restart of services in the second quarter: in June the PMI rose again, to 56.7, signaling an excellent pace of recovery, stresses Confindustria. “The recovery in services, based on current data, should continue in the third quarter: expectations in June are at very high values. Consumption rebounds”. While investments continue their favorable dynamics in the spring months, with orders on the rise, “the helm of the Italian recovery is in the hands of families, whose spending is finally estimated to be recovering”, thanks to more mobility and use of the accumulated savings. Industry is also growing steadily: thanks to the recovery in June (+ 1.3%, Csc estimates), production confirms expectations and grows in the second quarter (+ 1.1%) as in the first, despite the correction in May ( -1.5%). “This involves almost all sectors: the major exception is the fashion sector, still penalized by the drop in consumption linked to new habits in the Covid era”, highlights the Flash situation. Expectations on production and orders are at high levels, “but there are concerns about the increase in purchase prices and, in some cases, a shortage of materials”.
Employers have returned to expectations of an increase in employment: from March in manufacturing, from May in services. Fixed-term employees have grown a lot since March, returning above pre-crisis levels (in May they are at + 60,000). However, the rise of those with permanent contracts has not yet begun: -403 thousand since January 2020, net of those absent from work for over 3 months (for example for Cig). The decline in self-employed workers continues (-458 thousand since the pre-crisis). Furthermore, the exceptional increase in inactivity remains to be absorbed: still almost + 400 thousand. In terms of support for the restart, public resources for emergency measures in the field for 2021 “reach 6.0% of GDP, just under 6.6% in 2020”, with the DL ‘Sostegni Bis’ mobilizing 39 billion .