Economic activity in Lazio accelerated in 2006. SVIMEZ, Association for Industrial Development in Southern Italy, estimates GDP growth of 1.7 per cent in real terms.
In the non-construction industry, the upturn in demand that had begun in the second half of 2005 spread to the engineering, transport equipment, electronics, food processing and wood and furniture industries; the capacity utilization rate in the region increased, especially in the last half of the year. Qualitative indicators produced by ISAE, Institute for Economic Research and Analysis, signal a decline in orders and output in the first quarter of 2007 with respect to the previous year's levels.
Output in the construction sector expanded in 2006 in connection with the approaching completion of public works contracted previously and strong performance of residential building. Demand for housing continued to increase, as did property prices, especially in the capital. Tenders for new building projects were down on the previous year.
Household consumption continued to expand at a moderate pace and the climate of confidence among consumers improved in conjunction with the increase in employment and more favourable economic situation. Tourist flows increased on a par with the previous year due to the rise in overnight stays of foreign tourists, mainly from America, Germany and France.
Goods exports from the region increased; the trend involved mainly engineering, electronics and chemical and pharmaceutical firms and the traditional industries of textiles and clothing. Most of the growth in exports concerned the euro area, especially France and Germany, central and eastern Europe and Asia, while exports to the United Kingdom and United States diminished.
In 2006 employment grew by 1.8 per cent, compared with 0.4 per cent in 2005. The increase was more marked in the first half of the year and concerned the whole of industry, agriculture, and in the service sector retail and wholesale trade. The unemployment rate declined.
Bank lending continued to expand. Alongside the growth in the medium and long-term segment, short-term credit also accelerated in the last quarter of 2006 and early months of 2007.
Despite higher interest rates, lending to households for home purchases and consumer credit provided by banks and finance companies continued to grow rapidly. The acceleration in lending to the corporate sector was particularly marked in the case of energy, transport equipment, food and construction companies, while bank loans to chemical and pharmaceutical, rubber and plastics, electronics and communications companies declined.
There was a slight increase in the ratio of new bad debts to outstanding loans. The rise in the indicator was above average for the service sector and for construction companies.
Bank fund-raising grew by some 10 per cent, as in the previous year. Against a small downturn in current accounts and bond investments, there was a sharp increase in repos. Securities on deposit with banks increased by 7.3 per cent; the share of Italian government securities, particularly short-term paper, grew in conjunction with the rise in real market returns on these instruments.
