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Italy makes a fragile break from recession

Dec. 10, 2013 at 1:52 PM   |   Comments

ROME, Dec. 10 (UPI) -- Italy's economy broke out of a two-year recession in the third quarter with its gross domestic product flat compared to the second quarter, the government said.

The Italian economy has contracted in each quarter since the first three months of 2011, the Wall Street Journal reported Tuesday.

"We're at a turning point," Economy Minister Fabrizio Saccomanni said.

Italy now joins the ranks of Spain and Slovenia among countries where economic contractions were halted in the third quarter.

Italy's reversal is considered fragile. Domestic demand shrank in the quarter, the Italian data office Istat reported. Global employment concern Manpower said Tuesday Italy was among six countries out of 42 in a recent survey where employers indicated the first quarter would include contracting employment.

"In terms of domestic demand, I really don't see any signs of a recovery in the construction sector, where most of our clients are, until 2015," said Mauro Vandini, chief executive officer of Marazzi SpA.

Industrial production rose 0.3 percent in the third quarter, Istat said, even while sales shrank Capital investment in machinery, such as printing presses and tractors, declined 5.1 percent from the third quarter of 2012, a sign businesses are hesitant to invest in themselves.

Marazzi is an exception. It's parent company, Mohawk Industries, recently approved an $83 million investment plan for Italy.

"It's an important sign," Vandini said.

The economy, however, has either contracted or stalled for most of the past five years. Since 2008, the economy has contracted 7.3 percent.

""We can't really say we're out of the crisis," said Giorgio Squinzi, chairman of the Confindustria business lobby.

© 2013 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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