Italian manufacturers are increasingly confident about their business prospects, monthly data from a closely watched survey showed on May 27.
Manufacturing is a key driver of the Italian economy and exports, and the survey by the Isae institute showed confidence among manufacturers rising to 96.2 points in May from 95.9 points in April.
This marks the eighth month in a row of rising confidence, driven mainly by "a further reduction of inventories and an improvement in (companies') outlook for orders and for demand in general," the survey said.
Isae, which used new methods of calculation, revised its historical data on the new basis. In April, the index stood at 85.5 points but it was revised up to 95.9 points.
However, the survey also found that expectations for the level of production had fallen slightly and in general, manufacturing companies were uncertain about orders, employment and the overall economic situation in Italy.
The Italian economy, a big force in eurozone output, returned to growth in the first quarter when gross domestic product grew 0.5% from the previous quarter, but the recovery appears fragile.
At the beginning of May, the government revised down its forecast for growth this year to 1% from 1.1%, and for 2011 to 1.5% from 2%.
On May 25, the government announced severe austerity measures to reduce public overspending by 24 billion euros (US$29.4 billion) in 2011 and 2012.
Such leading indicators of economic activity as levels of confidence are being particularly closely watched by economists because of concerns that stiff measures in several European countries to correct overspending could, cumulatively, crimp a recovery from the economic crisis.
Copyright Agence France-Presse, 2010
