No. 19 - Economic developments in CalabriaAnnual report

Overall economic activity in Calabria showed some slight signs of recovery in 2010, despite some sectors continuing to be in difficulty. According to Prometeia estimates, regional GDP at constant prices expanded by 0.3 per cent.
Manufacturing, which in 2009 had been the sector hardest hit by the recession, showed a modest recovery from the middle of 2010 onwards; industrial production nonetheless remained at a historically low level. The fall in the number of hours worked and the capacity utilization rate also came to an end and they stabilized.
The effects of the crisis are still being felt, instead, in the construction sector. As regards public works, there was a decrease in the value of the contracts put out to tender in the region; the residential building industry was affected, instead, by the further contraction in property purchases.
In 2010 services benefited only to a limited extent from the recovery owing to the weakness of consumer demand. Retail sales contracted, especially among small and medium-sized outlets. In the transport sector, transhipments in the port of Gioia Tauro stagnated, while the number of passengers on commercial flights increased at all the airports in Calabria. There was a decrease in the number of overnight stays of both foreign and Italian tourists.
The slight improvement in economic conditions has not yet slowed the decline in employment that has been under way for four years, at a faster pace than in the South and Islands as a whole. The impact on the labour market has been attenuated, however, by the substantial recourse made to wage supplementation. Male employment accounted for the bulk of the contraction, while the female component was basically unchanged. The female employment rate is nonetheless one of the lowest in Italy.
The number of job seekers and the unemployment rate both increased. The young in Calabria continue to show a high unemployment rate and a low labour market participation rate.
In 2010 lending by banks to customers resident in Calabria accelerated compared with the previous year and remained above the national average. Provisional data for the early months of 2011 show that bank lending slowed slightly compared with the end of the previous year.
Bank lending to consumer households slowed in 2010; while the growth in consumer credit slowed, that in loans for house purchase accelerated. In December 2010 the average interest rate on loans for house purchase was just below that recorded in December 2009 but remained above the national average.
The credit granted to the productive sector increased, both for small enterprises and, more markedly, for medium-sized and large firms. This result benefited from a recovery in firms' demand for credit at a time when the supply was still marked by caution. The short-term interest rates applied to firms having their registered office in Calabria did not change significantly in 2010.
Credit quality, which was already worse than the national average, deteriorated further in 2010: the default rate for loan facilities increased for both consumer households and, more markedly, for firms, regardless of their size. The ratio of substandard to performing loans also rose.
The growth in the bank deposits of consumer households and firms progressively slowed in 2010, and at the end of the year they recorded a small contraction. Individually managed portfolios expanded after contracting in 2009.