Grandeconomist

Italian firms entered the final quarter with a mixed balance: demand had proved more resilient than feared, while the cost of producing goods and services remained a constraint. Banca d’Italia’s release on 8 October reports less negative assessments of the economy in Q3, although sentiment was still weaker than before the Middle East war.

The survey ran from 25 August to 18 September among industrial and service firms with at least 50 employees. Foreign sales supported activity as domestic sales weakened. Services and construction held up better than industry. Respondents described the closure of the Strait of Hormuz as having a limited effect on demand but a larger effect on input costs.

The accompanying report separates these pressures from firms’ investment and financing plans. Investment spending was still expected to expand in 2026; credit conditions were broadly unchanged and liquidity was generally adequate. Firms most exposed to war-related costs had passed some or all of those increases into selling prices.

That distinction matters for the record: resilient orders can coexist with a squeeze on production. Expectations for Q4 operating conditions remained unfavourable. These are firms’ assessments and plans, not realised Q4 output or a measured causal estimate of the war’s effect.