Italian consumer and business confidence dip in July

Business and consumer confidence in Italy cooled in July, in part due to recent events in Greece, but the underlying trend towards improvement continued to be in place, analysts said.

The Italian Statistics Office’s (ISTAT) business confidence gauge dipped by 0.3 percentage points to a reading of 103.6 as expected by economists, as expectations for production and new orders deteriorated slightly.

“Weaker global activity and uncertainty over Greece are likely to have dented confidence,” Gizem Kara, Senior European Economist at BNP Paribas said in a research note e-mailed to clients.

A similar gauge tracking consumer confidence fell more sharply, dropping by 2.8 points to 106.5 (consensus: 109.0).

That came as households became less confident about the current and expected economic situation. Expectations for unemployment also worsened.

“Overall, we view the correction in business and consumer confidence in July more as volatility than a change in the improving underlying trend. The ECB’s unconventional policy measures have eased financial and monetary conditions significantly and structural reforms are progressively bearing fruit,” Kara added.