Italian Business confidence on the up

After six straight falls, Italian business confidence has increased as production looks to be more prosperous, as well as an overall increase in orders, which all reflects positively on Silvio Berlusconi’s new government.

The ISAE think-tank’s confidence index increased to 89.6 from April’s 87.6.

Italy’s economy, which is the third largest in the euro zone, has experienced a growth of just 0.2 percent, compared with a euro zone average rate of 2.2 percent.

This is the first survey of its kind, after Berlusconi’s first steps in office were cutting taxation of overtime wages and productivity bonuses, which we welcomed by the business lobby Confindustria.

The outlook for production rose to 14, from 9 in April and an index of foreign orders rose to minus 16 from minus 20.

Even though the Italian economy is predicted to post little if any growth this year, and continue to under perform against their neighbours, the rising confidence in Italy is also synonymous with the growth experienced in Germany as the latter is Italy’s biggest trading euro zone partner.

According to the European Commission, Italian growth is still forecast to lag behind the rest of the euro zone a 12th consecutive year in 2008.

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