No. 11 - Economic developments in UmbriaAnnual report

In 2010 the economy of Umbria showed signs of recovering, but economic activity nonetheless remained below the pre-crisis level. Preliminary figures published by Prometeia indicate an increase of 1.5 per cent in regional GDP, basically in line with the national average. In 2009 and 2008 there had been falls of respectively 6.1 and 1.3 per cent at regional level and 5.2 and 1.3 per cent at national level.
In industry both production and orders increased. According to the business opinion surveys conducted by the Bank of Italy, sales growth was limited to exporting firms, which benefited from the recovery in world trade. With idle capacity still at a high level, capital spending was below the already low level recorded the previous year.
The Bank of Italy surveys show that production continued to decline in the building industry, while the sales of firms in wholesaling and retailing and tourism grew only a very little, despite the increase in arrivals in the region.
Employment in the region remained virtually unchanged on average in 2010; a downturn in the first half of the year was followed by an upturn in the second. The rise in the recourse to wage supplementation, especially under a waiver, helped to limit the impact on the labour market of the still low level of economic activity and in fact the unemployment rate remained at the level recorded in 2009.
Signs of recovery in the regional credit market gathered strength over the year; the slight recovery in demand was accompanied by virtually unchanged supply conditions. The increase in lending compared with 2009 was most pronounced for loans to the productive sector and especially to the least risky firms. Loans for house purchase also accelerated; against a background of stable house prices, the loans disbursed were mostly at variable rates.
In 2010 bad debts increased by about one third and they rose to 5.9 per cent of total loans. The simultaneous increase in substandard loans suggests that the deterioration in loan quality, although slowing, has not come to an end yet.