According to the survey conducted between 27 May and 14 June 2019 among Italian industrial and service firms with 50 or more employees, opinions regarding the current general economic situation remained negative overall, although less so than in the survey conducted in March. Firms' expectations of their own operating conditions in the short term were unchanged at slightly negative values. However, expectations in the construction sector improved thanks to better opinions regarding the trends in building sites. Firms' assessments of current demand are still negative but less so than in the previous quarter. Short-term demand expectations nevertheless deteriorated, weakened mostly by the performance in foreign markets, which was particularly negative for industrial firms in the North of Italy. As in the last survey, trade tensions continue to have an adverse effect on demand expectations.
Expenditure plans indicate increased investment in the second half of this year compared with the first six months, which would lead to a positive change in investment overall in 2019, in line with that forecast in the previous survey. In all sectors, however, opinions on the current investment conditions continue to worsen, albeit at a slower pace. Employment expectations remain favourable, especially in the construction sector.
Consumer price inflation expectations were revised upwards over all time horizons and in all sectors, most likely as a result of the growth in consumer prices observed in the latest official data. For the next 12 months, firms still expect only moderate growth in their own prices: the push coming from the cost of labour and raw materials contrasts the effects of competition and the lack of support from demand.
