Energia meno cara
The first factor to take into account are the prices of methane which have returned to pre-war levels, which pave the way for a recovery in production. The price of gas opened 2023 in sharp decline: 65 euro/mWh on average in January, from 114 in December (14 in 2019). According to the Confindustria Study Centre, the decline is favored by still high European gas stocks, a mild climate and slower consumption. The drop in gas prices is due to reduced demand, a mild winter, full stocks and a slow reaction by industry to falling prices, rather than the EU ceiling, according to two preliminary reports published by the EU agency for the cooperation between national energy regulators (Acer), and by the European Securities and Markets Authority (ESMA). At the same time, the slow decline for oil continues (80 dollars a barrel, from 81 in December), thanks to a production that has overcome a flat demand.
The maintenance of the labor market
Despite the context of uncertainty and the decline in industrial production recorded in November, the labor market held up better than expected. In 2022 the employed increased: +50 thousand in November from September and +280 thousand from January. This explains, in part, the decrease in the number of unemployed (-26 thousand in the last two months). The share of inactive people is also constantly declining. According to Bank of Italy estimates, unemployment should instead remain stable at 8.2%, to decrease to 7.9% in 2024 and 7.6% the following year.
Purchasing power also holds
In the third quarter of 2022, despite the increase in the price level, the purchasing power of households continued to grow slightly, thanks to the resilience of real income (also thanks to more employment) and past extra savings. However, inflation, still high in December (+11.6% from +11.8% in November) threatens consumption and prudent spending decisions are expected in the coming months.
Moderate slowdown in inflation
Even the slowdown, albeit moderate, in inflation in December bodes well. However, uncertainty and the restrictive push coming from rates still keep fears high of a (moderate) recession in 2023 in the euro area. Bank of Italy expects inflation to remain, with a moderation to 6.5 in 2023 – the figure has been revised downwards compared to the estimate of 7.3% in the mid-December update – and then a more marked slowdown later, at 2.6% in 2024 and 2% in 2025.
The manufacturing resists
Manufacturing holds with +0.1, but as Confindustria points out, there is a lot of heterogeneity between the sectors. These data mean that for the fourth quarter of last year the variation acquired for the total of industry is very negative: -1.7%, -0.6% in the third quarter. If we analyze the month of December, a weak scenario emerges: orders continue to decrease, stocks increase, expectations of a rebound are reduced.
