The series of crises and disruptions in recent years has made it increasingly difficult for firms to make confident forecasts for the future. Against this background, the Institute for economic research (IER) of the Chamber of commerce of Bolzano/Bozen and the Banca d'Italia analysed the data from the business survey ‘economic barometer’ to quantify the uncertainty of South Tyrolean firms and measure the impact of this uncertainty on their investment activity.
The study quantifies the sharp increase in uncertainty in the three-year period 2021-2023 and shows that a firm that is uncertain about its future turnover is about 3.5 percentage points less likely than other firms to increase its investments in the following year. The share of firms that are uncertain about the future development of their own revenues is higher among small firms than among larger ones. Moreover, it tends to be higher in construction and manufacturing than in other sectors.
The analysis, carried out by Andrea Locatelli (Bank of Italy, Trento branch), Luciano Partacini (IER) and Nicola Riz (IER), is published in the Bank of Italy's ‘Questioni di Economia e Finanza’ series.