Summary
The international economic crisis deepened in the course of 2008. The decline in economic activity was particularly steep in the last quarter of the year in the first few months of 2009. The cyclical downturn and the high degree of uncertainty eroded business and household confidence.
In the Lazio region the plant capacity utilization rate fell drastically in the last quarter of 2008. Firms reacted to the decline in demand by cutting back production and putting off planned investment. Some 53 per cent of industrial firms with 20 or more workers, interviewed for the Bank of Italy's annual survey, reported they had been significantly affected by the crisis; the recession had caused a reduction of about 15 per cent in these firms' sales revenues.
Activity in the construction sector fell as the previous expansion in residential building and renovation petered out. The amount of new public works contracts put out to tender was smaller than in the previous year.
The crisis affected the service sector less heavily than industry. Trends differed widely across the various branches of services.
Tourism in Rome, which is the regional as well as the national capital, decreased owing mainly to the reduction in overnight stays by foreign visitors, especially from the United States and Japan. Passenger traffic through the region's airports grew slightly, with an increase in arrivals and departures of Italian citizens.
The region's merchandise exports expanded, thanks mainly to the performance of chemical and pharmaceutical products, although the growth slackened perceptibly in the final part of the year. With the deepening of the international economic crisis, exports fell sharply in the first two months of 2009.
Employment grew more slowly. Service jobs accounted for most of the increase, while employment in industry diminished. Recourse to the wage supplementation rose, as did the unemployment rate.
The growth in bank lending to customers resident in Lazio slowed more markedly in the last quarter of 2008, reflecting the trend in lending to both households and firms. The slowdown involved both short-term loans and, to a greater extent, medium and long-term loans. In the first quarter of 2009 lending to households and firms slackened further.
New home mortgage loans to households diminished, reflecting the weakness of demand and a more cautious stance on the part of intermediaries. The rate of growth in consumer credit disbursed by banks and financial companies fell.
For loans to firms, there was an increase in the ratio of new bad debts during the year to the stock of loans outstanding at the start of the year. The indicators of credit risk on loans to households remained basically unchanged.
The growth in bank funding in Lazio reflected both firms' and households' greater liquidity preference, with an increase in current accounts compared with the previous year, and the expansion in bank bonds, stimulated by intermediaries' supply policies.
The year saw a worsening of the negative balance between subscriptions and redemptions of Italian investment funds and SICAVs; the outflow of resources was associated with a phase of pronounced financial market volatility and involved all categories of fund.
The reduction in official rates under way since October 2008 passed through to the terms and conditions applied to customers. In the first quarter of 2009 the rates on new mortgage loans to households came down by about 0.9 percentage points with respect to the end of 2008; interest rates paid on current accounts fell by about 1.3 percentage points.
The bank branch network continued to expand, while the number of municipalities served by banks was unchanged. The number of ATMs present in Lazio increased significantly and that of POS terminals also rose.
