Rome – The latest data from Italy’s national statistics institute ISTAT indicate that September was a challenging month for the country’s economic sentiment. The composite business morale index, which aggregates responses from manufacturing, retail, construction and services sectors, slipped to 95.9 from 97.0 in August. At the same time, the consumer confidence index fell to 91.2, down from 94.5 the month before, missing the median Reuters forecast of 94.0.
Mixed signals from the manufacturing sector
Despite the overall decline, the manufacturing sub‑index posted a small improvement, climbing to 91.9 in September. This was above the median forecast of 90.5 and up from 90.2 in August, suggesting that factories are still finding ways to stay resilient amid broader economic headwinds.
Government outlook and recent growth data
Prime Minister Giorgia Meloni’s administration revised its growth outlook in April, cutting the projected expansion to 0.6% for both 2025 and 2026, citing surging energy prices and instability in the Middle East. Earlier in the year, the government had aimed for 0.7% and 0.8% growth respectively.
Nevertheless, recent gross domestic product (GDP) figures for the first and second quarters showed stronger‑than‑expected performance, hinting at a degree of economic resilience despite the ongoing geopolitical turbulence. The government is expected to update its growth projections later this week and has indicated that the forecast could be close to 1% for the current year.
What the numbers mean for Italians
Lower consumer confidence typically reflects households’ concerns about future income, job security and rising living costs, especially as energy bills remain high. A dip in business morale can signal firms’ caution in hiring, investment and expansion plans. However, the modest uptick in manufacturing sentiment offers a counterpoint, suggesting that at least one key sector is finding ways to adapt.
Analysts note that Italy’s economy has been navigating a complex mix of domestic challenges and external shocks. While the revised growth outlook appears modest, the stronger‑than‑expected quarterly GDP numbers provide a foundation for optimism that the country can sustain a near‑1% expansion if current policies remain effective.
Looking ahead
Stakeholders will be watching the upcoming government forecast update closely. If the administration can maintain a growth path near 1%, it could bolster both business confidence and consumer sentiment in the months ahead. Conversely, any further deterioration in energy markets or geopolitical tensions could pressure the outlook again.
For now, Italian firms and households appear to be navigating a cautious environment, balancing concerns over energy costs with signs of underlying resilience in manufacturing and recent GDP performance.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
