Italy’s economy showed mixed signals in recent reports released by Istat and other agencies on Monday.
Italy’s GDP remained unchanged in the third quarter of 2024 compared to the previous quarter, with a modest 0.4% rise year-on-year, according to seasonally and calendar-adjusted data from Istat.
Istat detailed the quarterly trends:
- Final consumption expenditure rose by 1%.
- Gross fixed capital formation decreased by 1.2%.
- Imports increased by 1.2%, while exports fell by 0.9%.
Year-on-year comparisons showed:
- Final consumption expenditure increased by 0.4%.
- Gross fixed capital formation dropped by 1.1%.
- Imports rose by 0.6%, while exports declined by 1%.
The agency noted, “The carry-over annual GDP growth for 2024 is equal to +0.5%.”
Related: Economy Update – Q2 and July 2024
Manufacturing PMI Declines
The HCOB Italy Manufacturing Purchasing Managers’ Index (PMI) fell sharply in November to 44.5, down from 46.9 in October. This marked the lowest level in a year.
The downturn was driven by significant declines in new orders, with subdued demand and high uncertainty dampening activity. The backlog of orders decreased at the fastest rate in nearly a year, while international sales also suffered, with new export orders dropping at a rapid pace.
Unemployment and Employment Trends
Italy’s unemployment rate dropped to 5.8% in October, a 0.2 percentage point decline from the previous month, based on provisional Istat data.
Key labour market indicators included:
- Youth unemployment for under-25s fell by 1.1 points to 17.7%.
- The total working population rose by 47,000 in October, bringing employment to 24.092 million.
- Compared to October 2023, the number of employed people increased by 363,000.
Employment composition also shifted:
- Permanent contracts and self-employment saw increases.
- Temporary employment declined.
The employment rate rose slightly to 62.5% in October, while the inactivity rate increased by 0.1 points to 33.6%.
Mixed Outlook
While Italy’s employment figures provide some optimism, stagnant GDP growth and declining manufacturing activity underline the challenges ahead. Further developments in both domestic and international markets will be critical in shaping the Italy’s economy going forward.
