Italy loses thirty-five businesses a day

The retail sector has been the hardest hit by the ongoing recession, according to a report by the Italian Chamber of Commerce.

Italy loses thirty-five businesses a day
Over 5,300 companies closed in the first five months of 2013. Photo: Garry Knight/Flickr

More than 5,300 businesses closed their doors during the first five months of this year, a jump of 5.6 percent compared to 2012, Italian daily La Stampa said, citing Chamber of Commerce statistics.

The retail sector fared the worst, with 1,203 business closures, closely followed by 1,138 bankruptcies in the construction industry and 1,138 in manufacturing.

The property sector has also been hit hard, with 250 closures between January and May – almost double the amount in the same period last year.

Other sectors affected include the transport and storage industry as well as furniture makers and businesses that specialize in restoration work. 

The bankruptcies have been spread across the country, with 1,200 in the northern region of Lombardy, up 7.8 percent from last year, and 595 in Lazio, an increase of 11.4 percent. Tuscany saw a 38.2 percent increase in business closures, up to 441, while 153 businesses in Calabria went bust.

Last month Confindustria, Italy’s business association, said that the economic crisis had destroyed the country’s manufacturing industry as 55,000 firms had closed since 2007. 

In late June, a report released by the retailers association, Confesercenti, said that Italy was losing 134 retail outlets a day, a situtation described as a “massacre” by the association’s president.

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Italian shopping boom fuels economic growth

The Bank of Italy on Friday forecast the country's gross domestic product (GDP), enhanced by a rise in domestic demand, will expand by 1.5 percent in 2016 and 2017, in line with government estimates, after rising 0.8 percent in 2015.

Italian shopping boom fuels economic growth
Eager shoppers queue outside a Gucci store in Rome. Photo: Andreas Solaro/AFP

“The recovery continues gradually. Export growth is gradually being substituted by domestic demand,” the Bank said.

The construction sector in particular, which was hit hard by the country's deep three-year recession, shows encouraging signs. The GDP contracted by 0.4 percent and 1.9 percent in 2014 and 2013 as Italy struggled to recover.

Despite the positive outlook, the Bank warned “significant risks remain” due particularly to “the possibility of a slowdown in emerging economies (which) may be more pronounced and longer lasting” than currently forecast.

The unemployment rate, which stood at 11.3 percent in November — the lowest level for the past three years — is expected to drop under the 11 percent mark by 2017, it said.

Increased demand and “labour cost reduction measures introduced by the government” should boost employment.

Inflation, which averaged 0.1 percent in 2016 according to official figures released Friday — its lowest level since 1959 — is expected to edge up to 0.3 percent in 2016 and 1.2 percent the following year, the Bank said.