ROME (Reuters) – Morale among Italian businesses and consumers slumped in March, data showed on Friday, casting a shadow over already weak growth prospects for the euro zone’s third largest economy.
National statistics bureau ISTAT’s composite business confidence index, combining surveys of the manufacturing, retail, construction and services sectors, fell to 93.3 from 94.7 the previous month, posting the lowest reading since November last year.
The decline was driven by a steep drop in service sector morale. Manufacturing also registered a decline, while construction sector confidence picked up and sentiment among retailers was broadly stable.
Consumer confidence plunged this month to 95.0 from 98.8 in February, ISTAT said, far below a median forecast of 98.8 in a Reuters’ poll of seven analysts and posting the lowest level since November 2023.
The Italian economy grew by 0.7% in 2024, data showed this month, below the government’s 1% target and registering the same growth rate as in 2023. Most analysts expect a similar modest expansion this year, again below Rome’s target of 1.2%.
Recent economic data has been mostly weak, and the outlook is clouded by geopolitical tensions, the prospect of U.S. trade tariffs and the difficulties faced by Rome in deploying COVID-19 pandemic recovery funds received from the European Union.
(Reporting By Gavin Jones, graphic by Stefano Bernabei)
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