ROME, February 25th, (Reuters) – Italian consumer and manufacturer morale fell in February. The data came in under analysts’ expectations. It suggests the economy had a slow start.

National statistics institute ISTAT’s manufacturing confidence index fell to 113.4 in February from a downwardly revised 113.7 in January, lower than a median forecast of 113.9 in a Reuters survey of 12 analysts.

The previous January number was 113.9.

ISTAT’s composite index of business morale, which combines surveys from the construction, manufacturing and service sectors, rose slightly to 108.2 after a 105.3 increase due to better sentiment among building and service companies.

Consumer confidence this month fell to 112.4 from 114.2 in January, below a median forecast of 115.0 in the Reuters’ poll and hitting its lowest level since last May.

According to ISTAT the reason for the drop in popularity was a change in public opinion about the economic and general conditions.

Manufacturing saw both the production outlook and order expectations fall. Stocks were also down, leading to a decrease in stock accumulation.

According to government projections, the third-largest economy in the euro area will grow by 4.7% this fiscal year. This is when the gross domestic product returns to pre-pandemic levels. However, the Bank of Italy last month warned of increasing downside risks to the outlook.

These confidence surveys were done before Russia invaded Ukraine, and there was an announcement of additional sanctions against Moscow. This could have adverse effects on some Italian exporters.

ISTAT gave the following data on the February manufacturing confidence survey:

FEB JAN DEC NOV

All index 13.4 113.9r 114.9r 15.6r

Orders level 8.1 9.1r 10.1r 9.7r

Inventories -0.4 1.2r 0.5r -0.9

Output outlook 15.0 16.4r 180r 19.1r

r=revised

Crispian Balmer reports

crispian.balmer@thomsonreuters.com; Reuters Messaging: crispian.balmer.reuters.com@reuters.net