The economic recovery that began in Friuli Venezia Giulia in the second half of 2009 continued last year, but firms' production and sales recouped only part of the ground lost with the recession. The growth in exports at current values was only two thirds as great as for Italy as a whole and for the North-East on average. Among the region's leading sectors, high-tech companies turned in the best export performance.
Industrial production followed the trend in demand, but uncertainty as to the timing and strength of the recovery weighs on it. Fixed investment returned to growth after two years of decline.
In services, wholesale and retail trade suffered from the further cutback in household spending on durable goods. Traffic on the region's transport infrastructures grew slightly. Overnight stays by visitors diminished.
Total employment, including workers receiving wage supplementation, remained stable in 2010 after falling in 2009; the authorized hours of wage supplementation benefits rose significantly again. The unemployment rate increased from 5.3 to 5.7 per cent in connection with the rise in the number of persons seeking work. According to our estimates, between 2006 and 2010 the fall in employment in the region was determined by the diminution of the flows into employment, set against broadly unchanged flows out of employment.
In the twelve months to December 2010 loans to firms based in the region began growing again, thanks to the slight upturn in the demand for credit. Despite the moderate improvement in self-financing and the low level of investment, firms' external funding requirement increased in response to the greater need to finance working capital; debt restructuring operations were an additional factor. On the supply side, banks continued to tighten their lending conditions, though far less intensely than in 2009, particularly in the form of requests for more collateral and wider credit spreads for riskier borrowers.
Lending to consumer households grew at a rate of close to 5 per cent for most of the year. The expansion was sustained by loans for house purchases; consumer credit stagnated, given households' caution in spending and the evolution of disposable income. The latter factor was also reflected in increased recourse to current account overdrafts in order to make up for temporary shortages of funds.
New bad debts on loans to firms remained above the pre-crisis levels, while on loans to households they stayed at historically low levels.
The build-up of liquid assets, such as bank current accounts, on the part of savers resident in the region came to a halt in 2010. At current values the amount of financial assets held by households with the banking system was about the same as twelve months earlier. Compared with the end of 2009, the share of equity instruments diminished, partly owing to the disappointing performance of the stock market, to the benefit of Italian bank bonds and investment fund units.
