In the first half of 2009 economic activity in Italy underwent a sharp contraction, which was somewhat less severe in the South and Islands owing to the lesser importance of industry there. In the second half of the year there were signs of recovery, but the surveys conducted by the Bank of Italy in March and April 2010 indicate that the outlook remains uncertain.
The economy of Basilicata followed the general trends. According to Svimez estimates, GDP diminished by 5.0 per cent in 2009, in line with the national figure. There were some regional variations, however. The fall in industrial production was shallower in Basilicata as a result of the positive performance of the automobile industry, sustained by incentives for car purchases in the main European outlet markets, while the decline in employment was steeper and consumption was less resilient in Basilicata, as in the rest of the South and Islands.
The level of orders received by industrial firms in the region fell further, particularly as regards orders from abroad. Exports, net of those of the products of the extractive industries, diminished by 7.2 per cent. The auto industry helped to curb the export decline. According to ISAE qualitative indicators, the plant capacity utilization rate came down considerably in 2009, reflecting the reduction in demand and in stocks of finished products.
Employment decreased by 2.7 per cent on average, or by 5,200. The decline, in line with that for the South and Islands overall, exceeded the national average. The fall in employment was only partly reflected in the unemployment rate, which rose by 0.2 percentage points to 11.3 per cent. The rise in unemployment was buffered both by greater use of the Wage Supplementation Fund and by the increase in "discouraged workers", persons available to work but who did not take any job-search action.
Bank lending slowed sharply to grow by 2.0 per cent in Basilicata. According to the Bank of Italy's Regional Bank Lending Survey, one factor was the decline in the demand for loans by households and firms, which remained well below pre-crisis levels despite a slight upturn beginning in the second half of the year. After peaking in response to the intense strains triggered on the financial markets by the failure of Lehman Brothers, the tightness of credit supply conditions lessened gradually.
Lending to households continued to expand, though not as rapidly as in 2008, while lending to firms slowed sharply, with contraction of 0.3 per cent recorded at the end of the year. The deceleration was more marked for medium-sized and large firms, for which credit stagnated during the year. Lending to firms with fewer than 20 workers fell by 1.6 per cent. Mutual loan guarantee institutions attenuated the drop in lending to small enterprises.
The average interest rate on short-term loans to firms in Basilicata came down by 2.8 percentage points to 5.7 per cent. Large firms benefited to a greater extent from the reduction in rates.
The ratio of adjusted new bad debts to loans outstanding at the beginning of the year was 2.2 per cent, about the same as in 2008. For firms, the ratio of new bad debts remained high (2.9 per cent), albeit lower than in 2008 (3.3 per cent). The slowdown in the growth of new bad debts involved all sectors of economic activity, but the growth rate remains considerably higher for manufacturing firms (4.9 per cent). The quality of loans to consumer households deteriorated faster in 2009 than 2008, with the ratio of new bad debts rising from 0.8 to 1.2 per cent.
At the end of 2009 the Ministry of Economic Development's Department for Development and Economic Cohesion conducted the intermediate check on the progress of the southern regions with regard to the performance-budgeting mechanism of the service objectives. This system, introduced with the National Strategic Reference Framework for 2007-13, requires the regions of the South and Islands to strive to improve the quality of services in four sectors: i) education, ii) childcare and services for the elderly, iii) urban waste management, and iv) water resources.
For Basilicata, an improvement was found for all the objectives except urban waste management. Significant progress was found in the indicators regarding school dropout rates and childcare services. Accordingly, resources amounting to some €39 million were assigned to the region, or about 31 per cent of the total performance reserve net of the resources for the two indicators of education, for which no intermediate check was envisaged owing to the unavailability of data, compared with an average of about one fourth for the regions of the South and Island.
