In 2006 Tuscany's economy showed signs of recovery, bringing a lengthy period of stagnation to an end. Available estimates indicate that GDP growth was in line with or slightly below the figure for the country as a whole. The expansion was led above all by foreign trade, while the rate of increase in household consumption and investment spending was slow but positive.
After five years of pronounced difficulties, in industry output growth resumed, driven mainly by engineering; there were also signs of improvement in the fashion sector. With the cyclical upswing, the gradual winnowing of firms that has been taking place in recent years continued; investment resumed expanding, although at a very moderate pace.
Conditions were still favourable in the construction industry. A large number of public works projects were under way and housing demand remained strong.
In the service sector, the retail trade and above all the tourism industry continued to show signs of improvement. Port and airport traffic grew steadily.
Regional exports were again concentrated in traditional sectors, although the proportion of middle-to-high-tech and high-tech products increased.
Employment growth continued at a faster pace than in the country as a whole, mainly thanks to the service sector. In the last decade conditions have favoured an increasing use of labour, partly as a consequence of flexible forms of employment. Tuscany has made significant progress in terms of the participation rate, particularly for women, although the Lisbon objectives remain a distant goal.
In 2006 credit expanded at a faster pace than nominal GDP, as in previous years. Demand from the corporate sector increased, driven in part by larger working capital requirements resulting from the growth in orders. Efforts continued to restore balanced corporate financing conditions in terms of both the ratio of equity capital to third-party funds and of the maturity structure of debt. The rate of expansion in lending to households slowed but remained strong. New mortgages included a larger proportion of fixed-rate loans.
The quality of credit was unchanged. The flow of new bad debts during the year amounted to less than one percentage point, which was fairly low compared with the past. As the date approaches for the entry into force of the new Capital Accord, with its broader definition of default, greater care was taken to limit overdue payments.
Savers generally confirmed their preference for low-risk investments. A period of rising interest rates led to a shift away from more liquid assets and into bonds.
The organization of regional banks has changed significantly in recent years, reflecting the evolution of credit markets. Division-based arrangements are becoming widespread, with special operating units assigned responsibility for different segments of the customer base, and increasing use is being made of quantitative tools to measure creditworthiness.
Historically, Tuscany is one of the areas of the country with the largest number of local banks operating internationally. In recent years, with the increasing concentration of banks and the opening up of the economy eastwards, they have adopted different forms of organization abroad and moved into new countries.
