April 23, 2024

Wire Service Canada

Complete Canadian News World

Business resilience in the coming months is at risk

Business resilience in the coming months is at risk

Industrial production under curb

– The effects of the war halted Italian industrial production, which fell in March by 1.5% after rebounding in February (+1.9%). Thus, in the first quarter of the year, the CSC estimated a decrease in industrial production of 2.9% compared to the fourth quarter of 2021, which “will adversely affect the dynamics of GDP”.

Supply shock affects economic activities.

The unprecedented commodity price dynamics underscores the JSC, with particular reference to the increase in the price of natural gas showing 4-digit rates of variation (+1,217% on average in the pre-Covid conflict period) from Brent crude, which is in 3-digits (+104%), “measure the magnitude of the supply shock hitting Italian and European economic activity”.

Low orders

Returning to the results of the quick survey, orders in volume for March fell by 0.8% from February, falling by 0.1% in January: “Very negative data for production expectations since April.” After the sharp decline recorded in January (-3.4%), the partial recovery in February is mainly due to the primary effect of the statistical rebound.

net deterioration of the economy –

The outbreak of the conflict since the end of February has increased the incidence of factors that hindered Italian economic and productive activity, even before the war (high prices of raw materials, scarcity of materials). The result, therefore, is a net deterioration of the economic situation which is confirmed by the decline in business confidence recorded in March, to 105.4 from 107.9 in February, and in the decline in the manufacturing PMI (to 55.8 from 58.3 in February last month). ). Added to this is a significant drop in valuations and production expectations for manufacturers, whose value has not touched such low levels since June of last year.

READ  Car incentives on the road, expected to be 650 million for 2022 - regulations and institutions

Increases in energy and raw materials –

The CSC also emphasizes that the survey conducted among companies associated with Confindustria shows that 9 out of 10 companies in the sample are considered very significant, among the main obstacles arising from the conflict, not only increases in the cost of energy, but also those of other raw materials, Whereas, supply difficulties are related to approximately 8 out of 10 companies.

Some companies have already cut production

Faced with these problems, 16.4% of companies that responded significantly reduced production. The worsening indicator of economic policy uncertainty, which for Italy rose to 139.1 in March from 119.7 in February (+38.4% compared to the fourth quarter of 2021), “significantly increases the risks of a significant impact on the Italian productive fabric. The weakening of the economy in half the first of 2022.”

You may be interested in: