The Bankitalia numbers photograph the strength of Lazio. It reacted better than other regions to Covid. And it is ahead in the reprisal
The pandemic has hit the Lazio economy hard: word from the Bank of Italy and its annual report on the region’s economy. The numbers say that the GDP of Lazio fell by 8.4% in 2020. The crisis generated by the pandemic has led to a sharp decline in all components of demand: down consumption, investments, exports. The services sector was particularly affected, the sectors suffered the worst damage hotel, restaurant and trade, brought to their knees by the collapse of international tourist flows where a -86% was recorded.
Shadows but also lights. Lazio was not hit more than the national average, the macroeconomic situation remains similar to that of the country, which recorded a drop of 8.9% of GDP. Mostly, there are expectations of a decisive recovery: “three quarters of industrial companies and two thirds of services companies that expect to increase turnover in 2021“.
More indebted companies
Businesses held up but had to go into debt. The Bank of Italy report says that “During 2020 indebtedness increased considerably, reflecting the huge liquidity requirement emerged with the health crisis and some extraordinary operations of large groups “. In conclusion, cash was needed to keep going. The banking system has pumped liquidity.
The Government intervened with one moral suasion to avoid excesses. There have not been. “The loans were largely used to finance working capital. Also thanks to the government interventions of moratoriums and guarantees, the conditions of the credit offer were relaxed and accommodating“.
Employment down: young people and women penalized
The lockdown and blocking of production they have led to a decline in jobs. It was contained thanks to the measures launched by the government to protect employment. But in the face of the failures there was little to do: down the shutters and goodbye occupation. “The occupation in Lazio it decreased by 2% as in the Italian average. Fixed-term employees were especially penalized and the self-employed, young people and women“.
How well have the measures launched by the government, such as the blocking of layoffs and the extension of the redundancy fund, worked in Lazio? “They have mitigated the fall in employment, in particular by supporting the permanent component. Hours worked fell by 10.5%“. The data must be interpreted: there is a very wide gap between the lost places and the reduced hours, it means that the system has held up.
The employment rate in Lazio fell by one percentage point, to 60.2% but despite this, there is a higher average of employed than in Italy (58,1%). Employment decreased in services (-3.1%) and in the buildings, while in theindustry strictly speaking, the expansion recorded in the previous three years continued. The sector of the business and that of hotels e restaurants (which in 2019 employed almost a fifth of Lazio’s workers overall) were among the most affected. In fact, here the reduction in employees in 2020 was 4.4% in Commerce and 8.3% in the hotel and restaurant sector, accentuating the decreases recorded in the previous two years.
The occupation also in Lazio, as in the rest of the country, it fell above all among the youngest, in the 15-34 age group, fixed-term contracts are more common there; the reduction (-5.4%) was greater than that recorded at the national level ”.
Industry down 10%
Bank of Italy analysis reveals that in 2020 the Lazio industry recorded a strong contraction. It lost 10.2%, in line with the national average.
The decrease in domestic and foreign demand weighed on the decline, but above all the blockage of production, as part of the first package of restrictions introduced to contain the pandemic.
“In 2020 – explains the Bank of Italy’s Annual Report on the Lazio economy – the balance between industries with increasing turnover and those with decreasing turnover was largely negative (-30%) ”. To understand if it is a lot or a little we need to make a comparison with the Italian average: it has dropped by 48 points.
The expectations in Lazio are of a consistent recovery. In fact, just over three-quarters of companies expect to increase their turnover in 2021.
In 2020, many Lazio companies decreased their investments, while some increased them compared to the previous year: in Lazio there is one of the main national poles of the pharmaceutical chemist, here vaccines are filled and from the last period of 2020 the indicators were positively affected by the authorizations issued by the Medicines Agency.
This is what gives the region led by Nicola Zingaretti a fact that is extraordinary: in the country, the gap between those who increased and those who cut recorded a -19% investment. But in Lazio that case is just -4%. Bankitalia certifies that “For 2021, 42.4 percent of companies plan to increase investment“.
Citizenship income goes up, as does savings
In Lazio, the incidence of poverty in 2019 was more contained than in Italy, but in 2020 the use of support measures reached the national level. According to the Annual Report of Bank of Italy on the economy of Lazio, “the households benefiting from the Income or Citizenship Pension increased by a third, more than in Italy. At the end of 2020, the receiving nuclei were over 123,000. Another 43,600 have benefited from the emergency income (REM). Overall, the beneficiary families at the end of the year were 6.3% of those resident (6.1% in Italy)“.
The crisis has also had serious repercussions on consumption: in Lazio “in 2020 they fell by 10.6% in real terms“. It means that people have been afraid of the future and have postponed investments: who had to buy a car, make an important expense, has postponed. Indeed “the Covid-19 pandemic has led to a large and rapid increase in household savings. The growth in savings was associated with an increase in liquidity held in low-risk instruments, such as bank and postal deposits“.
However, household income fell by 2.6%: less than GDP, thanks to the income support measures adopted at national and local level. At the same time the growth of household bank deposits was recorded in all amount classes. “The disposable income – it is read – equal to about 20,000 euros per capita in 2019 (just over the national average), it fell by 2.6 percent last year at constant prices, as in the Italian average“.
Inequalities and reactions
The share of people living in Lazio has increased to 11.1% families with no income from work. Almost 11% of the region’s minors live in these nuclei (it was 7% in 2019).
The Gini index (which measures the extent of the inequality between 0 and 1) increased to 0.36, as in Italy. In summary: Lazio records an increase in inequalities following the worsening of the employment situation.
According to the data of the Information System on the Operations of Public Bodies (SIOPE), in 2020 “lhe total primary expenditure of local authorities grew in Lazio by 4.9% compared to the previous year. In per capita terms it amounted to € 3,646, a figure slightly higher than the average for Regions with ordinary statute. The primary current expenditure of Lazio’s local authorities in 2020, equal to 19.7 billion euros, increased by 5.2 percent, more than the RSOs and Italy (0.4 and 0.6 percent, respectively)“.
Translated from the financial language: iLazio reacted to the pandemic by investing. And those investments kept the economy going, softening its fall. Just think of how much has been invested in the Healthcare sector: in terms of machinery and personnel hired in hospitals. “Healthcare spending in Lazio has increased significantly to tackle the pandemic crisis: purchases of health goods and services increased and staff numbers were increased (+5,302 units, of which 25% doctors and 47% nurses“.
Support of 430 million from the Region
The Lazio Region in 2020 adopted various measures, in addition to those of the Government. It has invested in businesses, families, workers and the unemployed to mitigate the economic impact of the health emergency.
In the first half of 2020, with the arrival of the pandemic, the Region has allocated a total of over 360 million euros. According to the ‘Massimo Severo Giannini’ Institute for Studies on Federal Regional Systems and Autonomies (ISSiRFA-CNR), with interventions in the second half of the year the overall allocation in 2020 was in the order of 430 million euros, of which 64% with the region’s own resources and 36% with the remodeling of European structural funds.
In smart working even after
The Annual Report of Bank of Italy on the economy of Lazio he also notes that the digitization index in Lazio is higher than the national average. The only exception is for the digital service offering of local authorities, which is below average. It was very useful when we had to leave the offices to lock ourselves in the house and work from the living room.
In the field of smart working, we read that “according to the Survey on the workforce of Istat, from the second quarter of 2020 the share of employees in the non-agricultural sector who worked at least partially remotely in Lazio reached an average of 21.6% (2.1 in the corresponding period of 2019 and 14.8 in the national average); the share is reduced to 19% in the private sector (12.1 in Italy)“.
Will we all go back to the office? Or has the pandemic changed our habits? “According to the Invind survey, conducted in March and April 2021, companies in Lazio predict that around i14% of workers will continue to work remotely even after the end of the pandemic“.