by Alessandra Cardone
ROME, July 9 (Xinhua) -- Estimates on the general state of economy among Italian firms deteriorated in the second quarter of the year, the Bank of Italy said on Monday.
According to its quarterly survey on inflation and growth expectations, the central institute said opinions worsened across firms from all sectors, partly because of deteriorating financial market conditions registered in the early stage of the poll.
"Overall, assessments of current demand have stabilized, while domestic and foreign demand expectations have become less favorable," the Bank of Italy wrote.
Investment plans for 2018 were also slightly less positive in the second quarter compared to the previous one, and employment expectations worsened especially in construction.
The central bank further explained that "some 34 percent of firms believed the activity rate in the next three months will be held back mainly by uncertainty due to economic and political factors, against 27.4 percent in the previous quarter."
Expectations on consumer price inflation fell across all time horizons (from six months to five years), and among manufacturing companies a little more than among others.
Finally, it said service firms expected "a slight deceleration in their sales prices compared to the last survey (first quarter)," whereas manufacturing firms did not change their estimates.
The majority of firms believed the main driver behind upward price dynamics will remain production factor costs (raw materials, labor force, and intermediate inputs), while demand would exert a marginal impact only.
The survey was run by the central bank along with Italy's leading business daily Il Sole 24 Ore among 1,043 companies with at least 50 employees (404 from manufacturing, 447 from service sector, and 192 from construction) in June.
