Italian business confidence weakens in June, but consumers more optimistic

As is often the case, the June batch of confidence data is mixed. Confidence fell across all broad business sectors except construction, but improved among consumers, suggesting the economic recovery is not yet complete.

The first highlights are in the manufacturing sector, where confidence fell to its lowest level since November 2020. The decline is particularly pronounced in instrumental goods, where falling orders are accompanied by rising finished goods inventories. A soft manufacturing patch persists, and weak demand conditions (with insufficient demand looking set to become the most significant drag on production in Q2 as well) still appear to be delaying the start of the replenishment cycle.