ROME (Reuters, May 26, 2016) – Italian business and consumer morale rose in May according to data released on Thursday. Service industries gained confidence despite the continuing war in Ukraine. Manufacturers remained depressed.

National statistics institute ISTAT’s manufacturing confidence index fell to 109.3 in May from 109.9 in April, but still came in slightly above a median forecast of 109.0 in a Reuters survey of 10 analysts.

ISTAT’s composite Business Morale Index, which combines surveys of the retail, construction, and services industries, rose to 110.9 vs. April’s reading at 108.4.

A rise in retail and services sentiment outweighed declines in manufacturing and construction.

ISTAT stated that it has revised its methodology to calculate overall business sentiment. This resulted in a significant revision to the previous readings from April and prior months.

Consumer confidence rose in May to 102.7 from 100.0 in April, the first increase after four consecutive declines. This result comfortably beat the 100.5 median forecast in Reuters’ poll.

The government of Prime Minister Mario Draghi last month reduced its projection for economic growth in 2022 to 3.1%, down from 4.7% as a September projection.

Most independent organizations still consider the current forecast optimistic.

The first quarter of the Italian gross domestic product saw a 0.2% decline in value compared to the three previous months. Italy was a negative exception in the Euro zone where many countries experienced modest or even firm GDP growth.

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