Economic developments in SardegnaUpdate

In the first half of 2007 the rate of economic growth in the region remained moderate, following the previous year's trend. Industrial production expanded in response to stronger demand. According to the Bank of Italy's survey, the expansionary trend was most marked in the energy and raw materials sectors. Firms lost market share abroad: exports, excluding oil products, declined. Investment in public works and non-residential building diminished and results for the construction sector were further affected by the slack performance of the housing sector, witnessed by the trend of house prices. In the service sector, sales of large retailers increased and there was a steady rise in tourist inflows and numbers of passengers at regional ports and airports. Employment continued to expand on average in the first six months of the year and the unemployment rate decreased further. Bank lending grew at a slower pace; the expansion in household debt eased and credit demand from industry remained weak. Loans to service companies continued to expand. There was some improvement in the ratio of new bad debts to total loans. The growth in banks' sources of funds slowed slightly owing to the drop in households' saving rate.