Economic developments in VenetoUpdate

The rate of economic growth in the region declined in the first half of 2007. The slowdown affected mainly manufacturing, with a reduction in the rate of increase of export demand, and construction, in the form of a slowdown in residential building and a decrease in output in the public works sector. However, capital accumulation continued in the manufacturing industry, thanks to the maintenance of profitability levels. The service sector showed no signs of a slowdown. In tourism, in particular, the number of visitors continued to increase at a steady rate. Lending continued to expand. Despite the economic slowdown, credit to the corporate sector accelerated as investment activity gained momentum. On the other hand, the growth in lending to the household sector eased owing to the fall in demand for mortgages. The average riskiness of bank loans remained low. The rise in market rates and consequent increase in the opportunity cost of holding liquid assets prompted households to shift their financial portfolio towards government bonds.