In 2005 the level of economic activity in the region did not differ significantly from that of the previous year.
In manufacturing, the growth in sales, which were again buoyed by exports, was slower than in 2004 and did not match expectations; unit profit margins narrowed further. Turnover reflected the downturn in metals and metal products, while engineering and textiles and clothing recorded an improvement. Gross fixed investment increased.
The construction industry continued to expand thanks to the performance of residential building; public works made a negative contribution. Property prices rose again, but the number of sales diminished.
Retail and wholesale trade recorded a slight expansion with respect to the previous year. The good sales performance of large retail outlets contrasted with the difficulties encountered by small shops. Tourism showed signs of picking up as a result of the increase in foreign visitors.
The number of persons in work increased, partly as a residual effect of the regularization of immigrant workers. Firms made greater use of the Wage Equalization Fund.
Lending to residents in the region expanded at a faster pace than in the previous year, boosted as before by low interest rates, and involved both the productive sector and consumer households.
The largest increase occurred in medium and long-term loans, which benefited from the upturn in investment in industry and further growth in credit for real-estate operations (mortgages to households for home purchases and loans to construction companies).
Supply conditions remained easy. Unused margins on credit lines widened and breaches of overdraft ceilings diminished. The quality of credit improved slightly, both for households and firms. Numerous transfers of non-performing loans took place during the year, reducing the bad debt ratio.
Savers in Umbria continued to prefer highly liquid investments but also resumed investing in high-risk and high-return instruments, such as shares, corporate bonds and investment fund units. Bank fund-raising among consumer households grew at the same rate as in 2004, buoyed by a strong demand for current accounts and repos. Placements of insurance products increased.
The banks further extended their networks in 2005, not only via traditional channels but also in the form of internet banking.
