The survey conducted in December 2016 on a sample of Italian firms with 50 or more employees indicates a slight recovery in the fourth quarter across almost all sectors; the improvement in the outlook for 2017 is more widespread in relation to price developments, demand and investment; expectations for employment and financial conditions remain stable.
Firms in services and in industry report a further improvement in the current general economic situation, while construction firms report a deterioration, in particular for those in the non-residential sector.
Inflation expectations have been revised slightly upwards across all time frames and firms expect their selling prices to increase moderately over the next twelve months, due to forecasts of higher prices for raw materials and, to a lesser extent, for labour costs and intermediate inputs. Over the next three months one quarter of firms expect demand to increase, which would lead to an increase in their activity and have a marginal impact on their selling price developments; two thirds of firms expect demand to remain substantially stable.
Firms expect their investment expenditure to increase in the first half of 2017 and for the year overall. A positive contribution is expected to come from a measure in the 2017 Budget Law that will promote spending on advanced information technologies; one fifth of firms consider that it will affect them significantly.
