Italy sees huge dip in manufacturing confidence in March

March 24 | Updated: Mar 25 2005, 05:30am hrs
Confidence among manufacturers in Italy, Europe's fourth-biggest economy, unexpectedly fell to the lowest in almost two years in March as the euro's increase led to fewer orders and damped production expectations.

The Rome-based Isae institute's confidence index declined to 85, a level not reached since July 2003, from 86.6 in February. A median forecast of 25 economists surveyed by Bloomberg predicted an increase to 87. Isae assessed responses from 4,100 manufacturers between March 1 and March 18 for the report.

The strong euro certainly isn't helping European companies, said Francesco Trapani, CEO of luxury-goods maker Bulgari SpA, adding, We are going to see in 2005 an economic situation in Asia and the US that is much more brilliant than in Europe.

The decline in Italian business confidence and a similar drop in sentiment in Germany suggest the 12-nation economy of the euro region is struggling to gain momentum.