Italy has a diversified industrial economy, which is divided into a developed industrial North, dominated by private companies, and a less-developed, highly subsidized, agricultural South, where unemployment is high.
The Italian economy is driven in large part by the manufacture of high-quality consumer goods produced by small and medium-sized enterprises, many of them family-owned. Italy’s unemployment rate remained unchanged at 12.6% in April 2014 after the March jobless rate was revised down from 12.7% (Moody’s analytics).
The contraction in Italian economic output recorded since mid-2011 came to a halt at the end of 2013, mainly thanks to foreign demand and to the reduced need for fiscal adjustment. But numerous weak indicators and especially the seriousness of unemployment figures have highlighted that recovery is struggling to get under way.
In the first quarter of 2014, Italy returned to negative growth and lost more than 12,000 commerce and service firms, after businesses have gone to the wall at record rates amid the longest post-war recession. Youth unemployment has recently hit an alarming 46 percent. A study by Censis social research institute released said foreign investments in Italy in 2014 were 58% less compared to 2007. The crisis has affected all advanced economies, but loss of attractiveness for foreign capital was considerable in Italy, Censis pointed out. The grim economic picture has led Italy’s largest confederation of retail traders Confcommercio to estimate that it will take more than 11 years for the country to get back to its consumer spending levels before the outbreak of global financial crisis in 2007.