The first signs of recovery of the Italian economy: an increased optimism on behalf of businesses on investment condition, a contraction of the Gross Domestic Product that is almost exhausted and a return to the positive for direct investments from abroad. These are the trends that emerge from the most recent Banca d’Italia Bollettino Economico [Economic Bulletin], pubblicated in mid-October, which hypothesizes that, if these conditions were to be confirmed, a trend inversion for the economic activity by year’s end.

In its trimestral analysis, the central institute – despite recognizing the weakness of the Italian economic outlook compared to the other Euro area countries – identifies elements that stabilize the cycle. Firstly, the GDP’s flection (-0.3% in the second trimester) halved compared to the first trimester (-0.6%), principally due to the contribution of foreign demand: exports increased by 0.6%, mostly because of European Union markets, while imports decreased by 0.8%. Additionally, after seven months of decline, investments have started growing in machinery, equipment, and vehicles have increased. Investments in construction, however, have maintained their negative trend, although the decreases are now smaller in terms of percentages. The reduction in family consumption is also more contained. The second aspect that the Banca d’Italia evaluates positively is entrepreneurial confidence: the PMI (Purchasing Manager Index) in the manufacturing sector has progressively grown in the third trimester. Furthermore, the trimestral polling conducted by Banca d’Italia and Il Sole 24 Ore on the investment conditions compared to the previous trimester highlighted a renewed optimism on behalf of both the industrial and services sectors: the answers collected through the survey provide a comprehensive snapshot of businesses, which has returned to the levels of early 2011, that is to say, before the worsening of the Greek crisis and of the generalized sovereign debt crises of Europe’s so-called “peripheral” countries. A climate of stronger confidence translated, in the course of the second trimester, in a very limited flection of investments by business, and into the first increase in the purchase of instrumental goods after seven trimesters.

At the base of this optimism we find signals coming more from abroad than from within: besides exports, Banca d’Italia signals a return to the positive for the flux of direct investments coming into our country. During the first seven months, the positive figure is of 6.5 billion compared to net sales of nearly 4 billion in the corresponding period of 2012: a trend that was particularly influenced by net acquisitions of stock parcels of Italian groups by foreign operators. In contrast, there was a contraction of the direct investments realized by Italians abroad: 3 billion, compared to the 8.3 billion from the January-June period of 2012.