According to data from Svimez, Association for Industrial Development in Southern Italy, GDP in Valle d’Aosta declined by 0.7 per cent in 2005, after increasing by 1.3 per cent in 2004.
In industry, the good performance of the energy sector contrasted with the protracted weakness of demand and output in manufacturing. The loss of competitiveness on foreign markets affected the trend of exports, which slowed with respect to the previous year. Signs of improvement emerged in the early months of 2006.
In the construction industry, residential building performed well, buoyed by the increase in building permits and additional use of the incentives for renovations. In the public works sector, output was stationary.
In the service sector, retail sales increased slightly in nominal terms. In tourism, the decline in overnight stays eased considerably and arrivals began to pick up.
The uncertainty of the economic situation led to a deterioration in the labour market indicators. In 2005 the total number of persons in employment continued to fall, chiefly in industry excluding construction and in services, while in construction the number increased further. There was a slight rise in the unemployment rate.
The growth in bank loans to customers resident in Valle d’Aosta was of similar magnitude to the previous year. Lending to consumer households continued to expand, both for home purchases and in the form of consumer credit.
Loans to manufacturing firms contracted again, reflecting the current economic difficulties, and the growth in credit to service companies slowed. By contrast, lending to construction companies, mainly to build housing, accelerated.
The quality of credit deteriorated owing to the economic situation, fairly sharply in industry and more moderately in services and construction.
In the credit market, conditions were marked by extensive use of current account overdraft facilities and virtually stationary interest rates. Small firms continued to lengthen the maturity of their loans, while the practice stopped among large firms.
In 2005 households in Valle d’Aosta gave their preference to financial instruments with higher risk and higher return. Investments in shares and non-bank bonds increased rapidly and use of asset management services picked up again. Bank fund-raising slowed, mainly owing to the reduction in bonds, as did Italian government securities.
