With the Italian economy and world trade slowing down, demand for the region's goods and services began to contract in the second half of 2011, ending the recovery under way since the second half of 2009. These developments were sharply felt by capital and durable goods industries.
Sales to the industrial sector stayed below the levels shown before 2008: domestic demand remained sluggish, in contrast with the recovery in the foreign component. For the second consecutive year, exports at current value grew more slowly in Friuli Venezia Giulia than in the rest of the North East and Italy as a whole.
In services, retail trade suffered from the further reduction in household spending on durable goods, affected by the trend in disposable income and by the uncertain outlook in the labour market. Traffic through the region's transport infrastructures increased. After a two-year contraction, in the tourism sector the number of visitors rose, thanks to the contribution of the foreign component.
Between 2008 and 2011 the effects of the crisis on the labour market were tempered by massive recourse to income-support schemes: in 2011 the authorized hours of wage supplementation fell for the first time, although they remained at a historically high level. The yearly average of employed people rose slightly, despite the decline registered in the second half. The unemployment rate came down by half a percentage point, to 5.2 per cent.
The recovery in bank lending weakened during 2011 and the yearly growth rate of was slightly negative in December, reflecting a decline in lending to firms and a slowdown in credit to households.
Notwithstanding debt restructuring operations and the need to finance working capital due to the lengthening of collection time for trade receivables, firms' demand for loans weakened, primarily because of a reduction in fixed investment. Lending to businesses continued to diminish in all the main sectors of economic activity in the first quarter of 2012.
Lending to households slowed down in the second half of the year, mainly as a result of the fall in consumer credit related to the reduction in spending on durable goods; the growth rate of loans for house purchases remained stable despite the increasingly onerous conditions applied by banks. The downtrend in lending continued in the first few months of 2012, extending to every type of loan.
On the supply side, the tightening of banks' lending policies, mainly due to the rise in their funding costs related to the sovereign debt strains, was reflected in a generalized increase in interest rates; lending policies were characterized by more severe screening of riskier borrowers.
Firms' new bad debts on loans to remained at the previous year's levels, higher than before the crisis; new bad debts on loans to households continued to be limited.
In 2011 the recovery in households' bank deposits was driven by higher-yielding instruments with agreed maturity, whereas current accounts and repos declined. By contrast, households' securities, valued at market prices and held for custody by the banking system, declined significantly: compared with 2010, the weight of shares, non-bank bonds and investment fund units diminished in favour of government securities, also in connection with the high returns on these assets.
