Is Italy’s economic progress here to stay? It certainly looks that way!
Italy emerged from its longest recession in 60 years during the final quarter of 2013, when the country’s economy finally stopped contracting. The nation breathed a collective sigh of relief, particularly in light of national statistics agency Istat’s recently released preliminary report that shows growth of 0.1% during the year’s fourth quarter. But what is behind this new-found confidence in the Italian economy and are the positive changes really here to stay?
- “It is encouraging to see so many factors pointing towards a sustained and viable economic future” (Appassionata)
- Italy’s trade surplus doubles in year to October 2013 (Istat)
- 10% rebound in property transactions forecast in 2014 (Breglia)
The signs are certainly encouraging. Data from Eurostat has shown that Italy’s public debt has begun to fall, dropping to 132.9% of GDP in the third quarter or 2013 (from 133.3% in the previous quarter), thanks to the country’s implementation of a range of measures designed to improve its fiscal stability. The Bank of Italy is quietly confident, projecting growth of 0.7% in 2014 and 1% in 2015. It is the foundation of an upward curve that Italy is doing everything in its power to achieve.
Italy’s trade and industry figures certainly support the hypothesis that a period of growth is underway. Data from Istat has shown that production levels are rising, with industrial orders in November 2013 up by 2.3% on the previous month.
The agency also reported an encouraging 1.3% rise in exports in 2013; Italy’s trade surplus doubled in the 12 months to October 2013, reaching €2.9 billion according to the Istat data. The rise was largely thanks to increased volumes of exports to the US and China. Italy’s improved competitiveness and reduced production costs have encouraged the increase in exports – an indication that the country’s move towards globalization is beginning to achieve positive results.
At the same time, measures grouped together under the ‘Destination Italy’ package have begun to encourage a rise in foreign investment in Italy. The programme aims to simplify, facilitate and attract business to the beleaguered country and it certainly seems to be working thus far.
Other positive signs for Italy’s economy include the recent data from the Markit/ADACI Purchasing Managers Index, which showed that Italian manufacturing grew in January 2014 for the seventh consecutive month. At the same time, industrial product was shown by Istat to have recorded its first year-on-year increase, with annual output up 1.4% in November 2013.
Consumer confidence has improved correspondingly, rising from 96.40 in December 2013 to 98 in January 2014, another pointer from Istat’s data that Italy’s positive economic progress is more than just a blip.
In line with rising consumer confidence, Italy’s real estate market is also picking up. Investment in commercial real estate reached €4.3 billion in 2013, almost doubling the 2012 figure. Retail and office space were largely behind the increased level of investment, according to realtor Jones Lang LaSalle, indicating that improvements to Italy’s employment rate may be on the way thanks to increased business activity in the professional services and retail sectors.
Residential real estate predictions are also looking up, with real estate expert Breglia forecasting a 10% rebound in property transactions during 2014, after a 30-year low in 2013. This picking up of the market, combined with a 2.5% rise in tourism figures during 2013 (and predicted to grow by a further 3% in 2014, according to domestic forecasting) is expected to lead to considerable interest in the Italian residential property sector from overseas buyers over the year ahead.
Le Marche-based real estate expert Dawn Cavanagh-Hobbs of fractional ownership company Appassionata comments,
“Confidence in Italy’s real estate market is really picking up at the moment. There are some fantastic bargains to be had, with luxury properties coming on to the market at incredible prices. Appassionata’s own current renovation project, for example, will provide a standard of luxury that was unimaginable for this kind of price even two years ago.”
Dawn is referring to the family-run company’s latest project in the medieval town of Petritoli – a three bedroom townhouse known as Tre Archi. Packed with original features and in the process of being restored to Appassionata’s exacting standards, the property will provide stunning holiday accommodation at a fraction of the usual cost – just £55,000 for a share that entitles owners to five weeks usage per year (special price for first two shares only). Understandably, Dawn expects interest in the property to be intense,
“Our first two fractional ownership properties generated incredible interest and sold out during the recession, so it’s going to be exciting to see how quickly Tre Archi in Petritoli attracts attention, given Italy’s improving economic position. While it is still early days in terms of Italy’s financial recovery, it is encouraging to see so many factors pointing towards a sustained and viable economic future for this wonderful country.”
For more information contact Appassionata on 0039 073 465 8775 or visit www.appassionata.com.