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Italy business and consumer morale plunge in March as coronavirus impact bites

FILE PHOTO: A general view of almost empty streets in Milan, as the spread of the coronavirus disease (COVID-19) continues

(Reuters) - Morale among Italian businesses and consumers plummeted in March, data showed on Friday, hit by a coronavirus outbreak that has decimated activity in the euro zone's third largest economy.

The first piece of significant economic data issued by statistics institute ISTAT since the outbreak emerged on Feb. 21 showed its manufacturing confidence index sank to 89.5 in March from 98.8 in February.

That was slightly below a median forecast of 90.0 in a Reuters survey of eight analysts.

ISTAT's composite business morale index, combining surveys of the manufacturing, retail, construction and services sectors, plunged in March to 81.7 from 97.8, with all sectors nosediving.

The composite index was the lowest since June 2013, ISTAT said.

Consumer confidence dropped this month to 101.0 from 110.9, the lowest since January 2015 but slightly above the median forecast of 100.5 in Reuters' poll.

The surveys were conducted from March 2-13, mainly before the most restrictive measures imposed by the government's lockdown to try to curb the contagion.

More than 80,000 people have tested positive for coronavirus in Italy since the outbreak emerged little more than a month ago and some 8,215 have died, far more than in any other country in the world.

The Italian economy was struggling even before the outbreak, with gross domestic product declining 0.3% in the fourth quarter of last year from the previous three months.

Forecasts for this year vary wildly. The Italian Treasury has a base scenario of a full-year GDP fall of something more than 3%, sources have told Reuters.

Italian think-tank Prometeia on Friday projected -6.5%, while investment bank Goldman Sachs has forecast -11.6%


ISTAT gave the following data on the March manufacturing confidence survey:


MARCH FEB JAN DEC

Overall index 89.5 98.8r 98.4r 98.1r

Orders level -23.9 -15.6r -16.5r -17.4r

Inventories 3.7 3.4 4.8 4.5

Output outlook -17.1 0.7r 2.1r 1.7r

r=revised




((Reporting by Gavin Jones, gavin.jones@thomsonreuters.com; +390685224350; Reuters Messaging: gavin.jones.reuters.com@reuters.net))