The Bank of Italy document states that "in the third quarter the negative assessments on the general economic situation eased, although they remained worse than those recorded before the start of the war in the Middle East". Furthermore, "the total demand for its products or services has maintained a positive trend overall, with weaker opinions in industry in the strict sense and substantial stability in services and construction".
Furthermore, the Bank of Italy wrote further, "the sales dynamics were favored by the foreign component, in the face of a weakening of the domestic component. The conflict and the closure of the Strait of Hormuz continued to have a limited impact on the demand for its products or services and more significantly on the costs of production inputs".
Looking at what will happen in the coming months, "the prospects for its operating conditions in the fourth quarter remain unfavorable, while those for total demand and its foreign component are still positive and are accompanied by an expected increase in employment, albeit at a marginally slower pace than what was indicated in the same period last year".
Furthermore, as regards companies' investment programs for the remaining months of 2026, these "continue to be expansive, although the conditions for investing are still assessed as unfavourable, especially by smaller companies. The conditions for access to credit have remained stable and the expected liquidity position is overall adequate".
And then we come to inflation: according to the analysis of the Bank of Italy "sales prices continued to grow in all sectors, with a trend substantially stable compared to the previous survey in industry in the strict sense and in services and more contained in construction". And therefore companies "expect further increases in the next twelve months, linked above all to the prices of raw materials: the majority of companies affected by the increases attributable to the conflict declare that they have partially or completely passed them on to their prices. Inflation expectations remain essentially stable, with a slight reduction over the shorter horizons compared to the values reported in the previous quarter".
In detail, in the next twelve months "businesses in industry in the strict sense and in services expect a growth in price lists of just over 2.0 percent (2.4 and 2.1 percent, respectively)". However, in the construction sector "the dynamics would remain significantly more sustained, although weakening compared to the previous survey (4.5 percent, from 5.1)". As mentioned, it is "above all the trend in the costs of raw materials" that weighs heavily.
Finally, compared to the previous three months, "the share of companies that declared that they have already transferred or plan to transfer within the next 3 months the cost increases due to the conflict in the Middle East on the prices charged remained substantially stable: around 16 percent to a significant or almost complete extent and 57 percent to a moderate extent". And also "expectations on consumer inflation remain essentially stable, with a slight reduction on the shorter horizons (2.7 percent at six months and 2.6 at twelve months, from 2.8 and 2.7 in the previous survey). Expectations for two years and between 3 and 5 years have remained at 2.5 percent".
