In a cyclical situation marked by pronounced uncertainty, the more favourable signals that have emerged since the summer can be attributed mainly to an improvement in the indicators of business climate in the Centre and North. Since domestic demand is still weak, the gradual increase in the climate of confidence among firms is due to the resilience of export demand, whose share in overall sales is smaller in the South and Islands. Some improvement, albeit modest and geographically variable, can also be seen in firms' turnover and profitability according to the results of the business opinion surveys conducted by the Bank of Italy.
Exports grew in the first half of the year (compared with the corresponding period in 2012) in the North-East and the Centre, while they remained essentially unchanged in the North-West and fell sharply in the South and Islands. The wide differences in the performance of exports across the country reflects the differences in the sectoral composition of foreign sales and export markets.
The contraction in employment has continued but slowed in the second quarter of the year in the Centre and North, while continuing to proceed apace in the South and Islands. In the first half of the year the unemployment rate rose by 1.4 percentage points in the Centre and North and by 2.4 points in the South and Islands; the acceleration in the latter regions was partially held back by a fall in the supply of labour. The total number of wage supplementation hours paid began to fall again; only in the North-East was there a further rise.
The decline in bank lending to firms has continued in all the macro-regions and has been accompanied by a small decline in that to households in the South and Islands. The performance of bank lending continues to be influenced, throughout the country, by supply conditions that are still on the tight side, reflecting an increase in banks' perception of risk, and weak demand.
