According to the survey conducted between 22 May and 12 June 2023 among Italian industrial and service firms with 50 or more employees, in the second quarter of this year opinions regarding the general state of the economy remained unfavourable overall. Firms' opinions generally deteriorated in industry excluding construction, while they remained somewhat positive in the service sector and were slightly better in construction.
Firms' expectations of their own operating conditions over the next three months worsened in industry excluding construction but improved in the service and construction sectors. The boost from demand, which had supported economic activity in the first quarter of 2023, faltered; demand expectations for the coming months, both in total and foreign, also weakened. Although firms perceived investment conditions to be unfavourable, especially for those in industry excluding construction and in services, they continued to expect investment to grow this year. Employment prospects for the next three months remain on the upside.
Consumer price inflation expectations decreased across all time horizons, to 5.8 per cent over a twelve-month horizon and to 5.0 and 4.5 per cent over the two-year and three-to-five-year horizons respectively. Growth in firms' selling prices is expected to remain strong over the next twelve months, though slackening overall.
