Italy business and consumer morale fall again in September, as economy weakens

ROME, Sept 28 (Reuters) - Morale amongst Italian businesses and consumers continued to slide in September, data showed on Thursday, amid growing signs of weakness in the euro zone's third largest economy.

National statistics institute ISTAT's manufacturing confidence index fell to 96.4 in September from 97.7 the month before, short of a median forecast of 97.8 in a Reuters survey of 10 analysts.

The September reading was the lowest since November 2020, during the first year of the COVID-19 pandemic.

ISTAT's composite business morale index, combining surveys of the manufacturing, retail, construction and services sectors, fell to 104.9 in September, compared with August's reading of 106.7, hitting its lowest level since October last year.

Sentiment in all the business sectors weakened in September with the exception of construction, ISTAT said.

Consumer confidence fell this month to 105.4 from 106.5 in August, broadly in line with the median forecast of 105.5 in Reuters' poll.

Italian gross domestic product (GDP) shrank by 0.4% in the second quarter from the previous three months, and most analysts expect economic activity to remain weak over the second half of the year.

The government on Wednesday trimmed its forecast for GDP growth this year to 0.8% from a previous 1% forecast made in April, and cut the outlook for 2024 to 1.2% from 1.5%.

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

SEPT AUG JULY JUNE

Overall index 96.4 97.7r 99.1 100.0r

Orders level -19.3 -18.8r -16.2r -13.1r

Inventories 6.0 4.9r 4.9 4.9r

Output outlook 0.3 2.4r 3.7r 3.3r

r=revised

((Reporting by Gavin Jones, [e-mail]))