Italian business confidence declined to its lowest level in two and a half years in March as slowing economic growth and the euro's appreciation continued to weigh on orders and optimism. The Isae Institute's business confidence index fell to 89, the lowest since August 2005, from a revised 89.6 in February, the Rome-based research center said today.
A sub-index measuring Italian manufacturers' total orders fell to minus 16 from minus 13, according to today's report. Exporters are more pessimistic about their short-term sales outlook, with an index falling to 5 from 9 last month, according to a quarterly survey of exporters also released today.
``The fall in confidence is due above all to the contraction in orders,'' Isae said. ``In the first quarter of 2008, both current exports and the outlook for exports worsened.''
These factors prompted manufacturers to grow more pessimistic about Italy's economy in the coming months, according to a seasonally adjusted sub-index that fell to minus 30 from minus 24 in February, according to Isae.