N. 17/01 by Paolo Carnazza and Giuseppe Parigi

TENTATIVE BUSINESS CONFIDENCE INDICATORS FOR THE ITALIAN ECONOMY

ABSTRACT

The paper concerns the cyclical evolution of the Italian economy and, in particular, the role of confidence indicators. In the first part of the paper various confidence indicators, computed according to the European Commission (EC) methodology, are investigated. In particular, the analysis concentrates on the dynamics of some business climate indicators referred to the supply side of the economy (i.e. manufacturing, retail and construction industries).

In the second part of the paper, new confidence indicators exploring the wide informative set characterising the ISAE business surveys are computed. The ability of these indicators in predicting the short-term evolution of GDP, here considered as reference series, is compared with that of the previous EC confidence indicators. Finally, in the third part, some estimates of the relationship between the chosen business confidence indicator and some driving variables are presented.