May 28, 2015 / 8:20 AM / 2 years ago

Italy business and consumer morale fall in May

A couple strolls in front a shop during sales in downtown Milan January 3, 2015. REUTERS/Stefano Rellandini

ROME (Reuters) - Morale among Italian manufacturers and consumers both fell in May, missing expectations and raising questions about the strength of a nascent economic recovery, data showed on Thursday.

National statistics institute ISTAT’s manufacturing confidence index dropped back to 103.5 from 104.0 in April, the first decline after eight consecutive gains and the lowest reading since February.

That matched the bottom forecast in a Reuters survey of 16 analysts which pointed to a rise in the index to 104.5.

Consumer confidence fell more sharply and for the second consecutive month to 105.7 from 108.0 in April to post its lowest reading since January this year.

That was well below all forecasts in Reuters’ survey which had pointed to a reading of 108.2.

However ISTAT’s composite business morale index, combining surveys of the manufacturing, retail, construction and services sectors, slipped only marginally to 102.0 in May from 102.1 in April.

Italy posted economic growth of 0.3 percent in the first quarter, the first concrete sign of recovery after a three year recession.

Growth is generally expected to continue as the year progresses but still produce a full year rise in gross domestic product of just 0.7 percent, according to the latest forecast of Matteo Renzi’s government.

Reporting by Gavin Jones

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