No. 20 - Economic developments in SiciliaAnnual report

After decline less sharply than the national average in 2009, economic activity in Sicily recovered more moderately than in the rest of the country last year.
In industry, the main indicators showed an improving trend in the course of 2010, particularly from the spring onwards. The improvement in orders and production led to an increase in capacity utilization. The expansion of world trade also enabled Sicilian exports to recoup most of the significant loss recorded in 2009; however, the impact on regional economic growth was not great, owing to local manufacturing's structurally limited propensity to export.
Activity in the construction sector continued to contract, despite the upturn in the value of public works contracts put out to tender. Against the backdrop of a modest rise in house prices, the number of transactions concluded in the housing market fell further.
Firms in non-financial services registered a small gain in turnover. In retail trade, after diminishing in 2009 the value of food product sales stabilized.
In the tourism sector, following three years of decline the number of overnight stays increased, especially as regards visitors from abroad. The last decade has witnessed a shift in the composition of supply towards hotels of high quality.
On the basis of financial statement data updated to 2009, the recession caused regional firms' sales and profitability to fall, and exacerbated the problems in the management of trade credit. The crisis did not have significant repercussions on firms' financial debt.
In the labour market, the number of persons in work diminished again and the employment rate declined for the fourth year running. The employment rate among women is structurally low, about half the rate for men. The number of job-seekers grew. Sicily's unemployment rate is the highest among the Italian regions.
In the credit market, the growth rate in bank lending was higher than that of the previous year. The expansion in credit involved both firms, especially less risky borrowers and those financed by major banks, and households, in connection with the higher demand for mortgage loans.
In 2010, as in the two preceding years, the flow of new bad debts grew in relation to outstanding loans, especially for small firms and for households. Since the second half of 2008 the deterioration in credit quality has also taken the form of an increase in the frequency with which credit positions have passed into categories denoting growing difficulty (substandard loans, bad debts, losses).
With reference to financial saving, in 2010 bank deposits contracted, more sharply for firms, while the value of securities deposited with banks rose slightly.