Despite the bad news that seems to hover permanently over Italy’s economic future an unexpected ray of sunshine has broken through.
Purchasing managers indices measure what industry is ordering now for future delivery. They are regarded as solid indicators of where an economy is heading.
Industry does not increase orders if it is not expecting increased activity. The PMI is a reliable measure of business confidence.
Across the Euro zone Italy performed best with its largest rise in new orders since 2007. Ireland and Spain also performed well suggesting that those economies hardest hit in the recession are recovering quickest.
According to the PMI, the Eurozone is in an expansionary phase despite poor figures from France pulling the overall performance back. Private sector activity in France fell in June.
Economists suggest that the strong performances in Italy, Spain and Ireland are related to reform. France’s reluctance to adopt reforms may be responsible for that country’s poor performance.
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If true, the PMI result would indicate that what little reform has been achieved in Italy has had a positive effect. Hopefully, it will inspire Premier Renzi to push on with his plans for labour markets, sector protection, bureaucratic and judicial review.
By Ex-Australian Politician in Tuscany Stephen Lusher
Stephen Lusher served five terms in the Australian Federal Parliament. He worked around the fringes of politics before setting up Lush on Bondi, a trendy bar on Sydney’s Bondi Beach.
Frequent trips to Italy led to an inevitable love affair with Tuscany. He and his wife Cathy sold up in Sydney and purchased Il Mulinaccio in 2008.
Within two months of moving to the Chianti Hills he was diagnosed with throat cancer. The experience led to him re-focusing his life and priorities. After a few uncomfortable years he thinks he has it beaten.
Stephen’s interests include wine, food, history, culture and travel. He struggles with the Italian language and indulges himself in some occasional writing.