In 2010 economic activity in Tuscany began to grow again. After contracting by more than 5 percentage points in the two previous years, preliminary estimates show regional GDP growing in 2010 at a modest pace that did not exceed the 1.3 per cent recorded by the country as a whole.
Manufacturing industry experienced a recovery in both production and sales, that occurred mainly among export-oriented firms and those of larger size. The partial increase in plant capacity utilization and the uncertain outlook for demand nonetheless led to a further reduction in investment.
In 2010 Tuscan firms' exports rose in line with Italy's. In the two most important economic sectors (fashion and engineering products) exports are still about 10 per cent below their pre-crisis level. Compared with the performance of world trade, the contraction in regional exports in 2008-09 was smaller, as well as the subsequent recovery.
The recession has stimulated the innovative activity of part of manufacturing industry, especially among more export-oriented firms. Compared with Italy and especially with foreign countries, Tuscany is still marked by a lower ratio of private R&D expenditure to GDP; by contrast, the public component is in line with the average of the OECD countries and above the figure for Italy.
Tuscany continues to be marked by the presence of numerous industrial districts specialized in traditional Italian products and made up mostly of small firms. In the last ten years the average economic performance of the Tuscan firms belonging to industrial districts has been worse than both the national average and the one of the Tuscan firms not belonging to industrial districts. Over the same period the districts have contracted in terms of number of employees, sales and exports; accordingly, the fall in industry's share of regional GDP was larger than the national one.
The level of activity in the construction fell in 2010, for the fourth successive year. There were no signs of a recovery in public works or in either residential or non-residential building.
In the service sector, which had suffered less from the crisis, there was a partial recovery. While retail sales contracted further, reflecting the weakness of domestic demand, transport and international tourism recorded a fairly strong growth. Medium-term analyses nonetheless show a deterioration in the competitiveness of the tourism sector. Tuscany was only partially successful in benefiting from the rapid increase in the number of travelers worldwide, and in fact was outstripped in this respect by Italy as a whole. In the last ten years the supply of lodging services has grown, more than demand, while shifting upwards in terms of quality.
Despite the recovery in productive activity, in the first nine months of 2010 employment in the region declined; the reduction was mainly concentrated in the industry sector, among permanent and young employees, the latter being the hardest hit by the economic crisis. In the last quarter of 2010 the decline stopped and in the early months of 2011 recourse to employment support measures (wage supplementation) decreased. Between 2004 and 2010 the difference between the male and female employment rates remained virtually unchanged at about 20 percentage points, in line with the figure for the Centre and North.
In 2010 the growth in lending remained low, after a significant slowdown as a result of the crisis; there was a slight acceleration in the early months of 2011. Compared with the period before the crisis, banks paid more attention to the riskiness of customers in establishing the amount of credit, the interest rate and the collateral. The risk premium, measured by the interest rate spread, did not change significantly on average after the rise that occurred at the beginning of the crisis.
Firms' demand for loans was primarily addressed to restructure their debt and, albeit to a lesser extent, to obtain working capital. That of households was mainly for mortgage loans, serving in part to replace existing borrowings. The supply of credit was less restrictive than in 2009. The difference between the growth rate of loans granted by the top five Italian banking groups and the higher rate recorded by the rest of the banking industry decreased in 2010.
There was a further deterioration in the riskiness of bank lending. For firms the default rate for loan facilities increased, as did the ratio of other impaired loans; furthermore, widespread debt restructuring is still under way. Credit risk indicators for households remained unchanged, partly due to debt consolidation and restructuring and to the measures banks adopted to support customers.
Firms' rather low degree of capitalization makes them fragile, especially when economic conditions are unfavourable. In the years before the crisis those firms that subsequently incurred in financial difficulty stand out from those that continued to make their payments on time by being more highly leveraged. Systematic differences are not found instead for sales or operating profits.
