According to the latest Flash Conjunction of Confindustria Centro Studi, the Italian economy remains exposed to negative external factors that put pressure on the productive fabric.

The impact of duties and the weak dollar on Italian exports

The main risk comes from international trade: the US duties and the devaluation of the dollar against the euro (+12.7% since the beginning of the year) determine a possible Italian exports to the US plummeted by -16.5%. A fact that weighs heavily on one of the most important markets for Made in Italy, undermining business confidence and limiting investment capacity.

On the domestic front, the consumption are only minimally supported by the increase in real income (+0.3%), while precautionary saving prevails; the industrial production shows a mixed performance (-2.4% in August after +0.4% in July) with manufacturing PMI below 50, in the area of contraction.

The investments maintain a positive trend, thanks to more accessible credit and a resilient capital goods sector, but fail to offset the weakness of exports. I services grow slowly, driven by tourism, but do not compensate for the slowdown in industry.

International scenario: Europe weak, USA slowing down, China growing

Globally, theEurozone remains penalised by the crisis in German industry, the USA slow down (+0.9% GDP in the second quarter) and the China grew with recovering exports (+8.3% per annum in September), although it suffered a net drop in trade with Washington.

In summary: falling energy costs and reduced geopolitical uncertainty are not enough. Italy faces the impact of tariffs and a weak dollar, with a real risk of -16.5% of exports to the US.

Read here the complete Flash Report.