In 2009 the international economic and financial crisis caused Italy's GDP to decline by 5 per cent. According to the main forecasting institutes, the contraction of activity in Tuscany was substantially the same as at national level.
The manufacturing sector, which felt the impact of the crisis earliest, recorded a drop in sales and production levels of more than 15 per cent. Overall developments were worse for small enterprises (especially craft firms) and in the fashion sector.
The decline in industrial activity reduced the capacity utilization rate to historically very low levels. In 2009 the Tuscan firms sampled for the Bank of Italy's survey cut back investment by more than 15 per cent.
Exports fell by about 9 per cent. This was less than the Italian average, mainly as a consequence of the increase in exports of metalworking sector.
In the construction sector, the cyclical situation was negative and growing worse. Demand for housing weakened further, owing mainly to the uncertain employment outlook. Construction of public works was affected by local authorities' budget constraints under the domestic stability pact.
The crisis also affected services, albeit less strongly. Retailing was hit by the drop in households' disposable income, the transport sector by the fall in trade and in the number of visitors from abroad.
Employment began to feel the repercussions of the recession, despite massive recourse to wage supplementation. Its level fell by 0.5 per cent on average for the year, but the decline was steeper in the second half (1.2 per cent). The reduction almost entirely concerned workers on fixed-term contracts. The unemployment rate rose from 5.1 to 5.8 per cent. Taking account of the workers receiving wage supplementation as well, the unutilized share of the labour force amounted to 6.4 per cent.
The indicators available at this time give positive signals for the current year, although the recovery still appears to be weak and hesitant. Businesses' assessments of orders and production have improved, and exports have begun to grow again. According to the Bank of Italy survey, in 2010 turnover is expected to increase slightly in both industry and services.
Bank lending to firms continued to slow down in 2009. At the end of the year its rate of growth was still slightly positive (2.3 per cent). In the first quarter of 2010 the increase in lending remained modest.
Demand for credit was limited by firms' low borrowing requirements for investment. Supply reflected the persistently prudent stance taken by the banking system in the light of its heightened perception of risk. According to the survey conducted with a large number of banks operating in the region, lending standards began to be made less restrictive from the second half of the year onwards.
The cost of credit fell, following the pattern of the Eurosystem's reference rates. A study of a sample of regional firms found that the spreads between the rates applied to firms with different credit ratings widened from the third quarter of 2008 onwards.
In a context of greater difficulty in gaining access to credit, collective loan guarantee consortiums, which operate mainly in favour of small production units, played an expanded role. According to the findings for a closed sample of small Tuscan firms, in the two years 2008-09 having a collective guarantee was associated with generally higher rates of credit growth. In addition, the intervention of the consortiums, which makes it possible to limit the losses in the event of business failure, is reflected in a lower interest rate on current account overdrafts.
Lending to consumer households also expanded at a historically moderate rate last year (4.0 per cent); it accelerated in the first few months of this year. Despite the sharp decline in the cost of credit, demand for loans for house purchases diminished, reflecting the steadily deteriorating situation in the labour market.
Loan quality worsened further, more markedly for firms than for households. New bad debts on loans to firms rose to 2.5 per cent of the amount outstanding, a ten-year high. The corresponding ratio for consumer households increased but was still low (1.0 per cent). The deterioration was contained by the measures taken by banks in favour of borrowers in difficulty. The proportion of substandard and overdue loans increased, reflecting the greater difficulty of households and firms in making timely repayment.
Tuscan savers' propensity to hold liquidity remained high, in concomitance with a considerable decline in the yields on short-term government paper; the opportunity cost of holding cash fell virtually to nil.
