The economy of the Valle d'Aosta region showed signs of recovery in 2010. According to Prometeia estimates, regional GDP grew by 1.4 per cent, recouping less than half of the loss recorded in the previous two years. Services and industry contributed to the expansion, while in construction there was a further decline in value added.
After two years of decline, orders and production in industry upwards thanks mainly to the growth in foreign trade. The exports of Valle d'Aosta's firms recovered sharply, outpacing both the average for regions of the North-West and for Italy as a whole, but still did not regain the pre-recession levels. A key contribution came from sales of metal products, the region's leading export sector. The ample margins of spare capacity in industry discouraged new investment.
In construction, the business opinion surveys found a further contraction in activity; some indications of improvement came from the housing market, with an increase in the number of transactions and selling prices. Feeble signs of recovery came from the main segments of the service sector: tourist flows and heavy vehicles transit traffic increased; in the context of a small increase in households' final consumption, spending on durable goods decreased.
The pick-up in economic activity fostered an increase in total employment, contrary to the trend in the North-West and the rest of Italy. Services accounted for all of the gain, offsetting the declines in agriculture and industry; nearly all of the growth involved women and self-employed workers. The recovery in employment is also testified to by the abrupt drop in recourse to the Wage Supplementation Fund, which returned to the pre-recession levels.
The latest data, on orders in industry and wage supplementation in particular, suggest that the recovery lost steam in the first quarter of this year.
After a small contraction in 2009, bank loans to residents in Valle d'Aosta showed renewed growth last year. There was an increase in both lending to consumer households, which accelerated with respect to 2009, and lending to firms, which had declined the previous year. Bank lending continued to expand in the first quarter of 2011, albeit at a slower pace than in 2010. The quality of loans to consumer households remained high, but there was a deterioration in the quality of loans to firms, especially as regards credit to producer households. The decline in the quality of loans to the latter was reflected in a larger share of both bad debts and loans to borrowers in temporary difficulty relative to total loans.
Financial saving in the region increased for firms but diminished for households. Although savers continued to prefer low-risk financial instruments, they gravitated towards assets offering higher returns. Households' deposits diminished, to the benefit of government securities and units of collective investment undertakings. Firms' reduced their current account balances, reallocating their portfolios in favour of repos, government securities, bonds of non-bank issuers and shares.
