The economic recovery that began in the Marche region in the second half of 2009 and continued in the first few months of 2010 still appears weak and uncertain. Moreover it seems to be limited to the most productive firms in different sectors, which are well-established in the international markets, thanks to the strategic transformations undertaken in the last decade. The recovery is accompanied by moderate optimism about developments in the rest of 2010, fueled by signs of an upturn in the global economy and by the end of destocking, although there is widespread concern about the employment outlook. Overall, the feeble recovery under way is plainly insufficient to make up for the drop in output during the recession, which was especially severe in the last quarter of 2008 and in the first of 2009. According to estimates provided by Prometeia and Svimez, the region's GDP contracted by nearly 6 per cent in real terms in 2009, more than the Italian average.
The greater severity of the recession in Marche was due to some structural characteristics of the regional economy, such as its high propensity to export, the larger role of industry and its specialization in the fashion sector and durable consumer goods, whose purchase is easier to postpone in times of crisis. Between the autumn of 2008 and the end of 2009, regional exports contracted by about one third, twice as much as for Italy as a whole. Together with the persistent weakness of the domestic demand, this caused the turnover of industrial firms in the region to fall sharply (by more than 15 per cent according to the Bank of Italy's survey). Among the main sectors of regional manufacturing, the decline was very substantial for the footwear and furniture and even greater for the machinery sector. The proportion of firms subject to bankruptcy proceedings, or ceasing their activity, increased. Companies that had restructured in the preceding years were found to be less vulnerable to the recession.
Investment slumped. Spending on plant and equipment was restrained by ample margins of spare capacity and by the uncertain economic outlook. Residential investment, which had enjoyed a long period of growth, was affected by the difficulties in the labour market and the deterioration in household confidence; the number of property sales diminished and building activity contracted.
The service sector also suffered the effects of the crisis, though less sharply than industry. Households contained their purchases of durable consumer goods, while the tourist industry was sustained by overnight stays by Italians, who more than made up for the drop in foreigners.
Employment fell, especially in commerce and industry, among young people and workers with a low level of education. The average annual unemployment rate increased from 4.7 per cent in 2008 to 6.6 per cent, remaining, however, more than one percentage point below the national rate. The recession's impact on the labour market has been cushioned up to now by a massive recourse to income-support measures; these include wage supplementation granted under waiver, highly utilized in a region where small and medium-sized enterprises abound, many of them not covered by the traditional safety net.
The rate of growth in bank lending continued to decline during 2009 and was flat at the end of the year. A slight increase in lending to households was set against a decline in lending to firms, especially those in industry. Both demand- and supply-side factors contributed. With investment stagnant and production at modest levels, total demand for credit weakened. Applications for loans, largely due to debt restructuring needs, came mainly from the firms with less solid profitability and financial conditions. Banks tightened their supply conditions vis-à-vis these firms, partly as a result of a higher propensity, during the recession, to anchor credit ratings to objective indicators derived from companies' financial statements. However, the tightening appears generally to have loosened in the last quarter of 2009 and in the first few months of 2010, according to the results of the surveys conducted on both banks and firms. The growth in lending also differed by size-class of bank: it was higher for small and medium-sized banks, many with their head office located in the region, than for banks belonging to the Italy's five largest banking groups. The intense activity of loan guarantee consortiums helped small firms gain access to credit.
Reflecting the expansionary stance of monetary policy, interest rates fell, but their dispersion increased; in particular, larger spreads were applied to loans to more heavily indebted firms, for this reason deemed riskier.
Since the crisis started, the risk on loans to firms in Marche, measured by the ratio of new bad debts to outstanding loans, has risen rapidly and been consistently higher than the national average, despite a decline in the last quarter of 2009.
The fall in households' disposable income worked against an expansion of financial assets. Bank funding remained unchanged, with a growth in bond issues counterbalancing a fall in deposits. There was a reduction in the value of securities held for custody by the banking system, accompanied by a shift in their composition away from government securities and towards investment fund units, bonds other than bank bonds, and shares.
