Economic activity in Basilicata was slack during 2005, reflecting the protracted cyclical weakness characterizing the national economy. The persistently slow growth of domestic demand due to the reduction in households’ consumption capacity was a further contributory factor.
Agricultural output continued to increase, driven by the recovery of cereal crops. Output in manufacturing was stationary overall, showing small signs of an upturn that were not confirmed at the beginning of 2006.
The Bank of Italy’s survey of a sample of firms with 20 or more employees indicated a slight decrease in turnover at constant prices. Exports of cars and living-room furniture, the region’s leading industries abroad, diminished. The construction industry showed no clear signs of recovery, with the public works branch encountering the greatest difficulties. The performance of the service sector was generally positive; retail sales were slightly down but tourist numbers increased significantly.
Employment again declined, mainly due to the drop in the number of self-employed workers. Although the unemployment rate was still falling, it remained higher than the national average.
Bank credit continued to expand. Loans to consumer households were driven anew by the demand for home-purchase mortgages and for consumer credit. Lending to the corporate sector increased with the small growth in firms’ financial requirements.
Credit quality reflected the weak business cycle and the ratio of new bad debts to loans rose above the national average. Banks’ fund-raising increased, particularly the more liquid component. The face value of securities on deposit with the banks decreased as households shifted their savings into non-financial investments.
