Morale amongst Italian businesses and consumers rose in May, new ISTAT data has shown, with service industries regaining confidence despite the ongoing war in Ukraine while manufacturers remained downbeat.
National statistics institute ISTAT's manufacturing confidence index fell to 109.3 in May from 109.9 in April, but still came in slightly above a median forecast of 109.0 in a Reuters survey of 10 analysts.
ISTAT's composite business morale index, combining surveys of the manufacturing, retail, construction and services sectors, rose to 110.9, compared with April's reading of 108.4.
More positive sentiment in the services and retail sectors outweighed a decline in manufacturing and construction.
Overall Business Sentiment
ISTAT said it had revised its methodology for calculating overall business sentiment, leading to a marked revision of its previous readings for April and preceding months.
Consumer confidence rose in May to 102.7 from 100.0 in April, the first increase after four consecutive declines. The reading comfortably beat a median forecast of 100.5 in Reuters' poll.
Prime Minister Mario Draghi's government last month revised down its 2022 economic growth forecast to 3.1% from a 4.7% projection made last September.
The current forecast is still considered optimistic by most independent bodies.
Italian gross domestic product contracted by 0.2% in the first quarter from the previous three months. That made Italy a negative outlier in the euro zone, where most countries posted modest or firm GDP growth.
Earlier this week, Italy and Hungary urged the EU to call explicitly for a ceasefire in Ukraine and peace talks with Russia, putting themselves at odds with other member states determined to take a hard line with Moscow ahead of a summit next week.