The annual report “The economy of the Marche” is presented today at Ancora.
During 2023, the expansion of economic activity lost steam. In the second part of the year, a weakening of the cyclical phase appeared evident. In a context characterized by continuing geopolitical uncertainties, the information available so far does not outline a recovery in activity in the first part of the current year.
The macroeconomic framework
According to the quarterly indicator of the regional economy (ITER) developed by the Bank of Italy, in 2023 the regional product would have grown in real terms by 0.6 percent, less than in Italy (0.9 percent based on data of Istat) and slowing down compared to the previous year. The coinciding Regio-coin indicator for the Marche region, which captures the trend of the underlying component of the regional economic cycle by purifying it from erratic components, signals a progressive weakening of economic activity in 2023, reaching negative values in the last part of the year. In the first months of 2024 the indicator reached values close to zero.
Businesses
The Marche industry has recorded a decline in activity, penalized by sluggish demand on both the domestic and foreign markets. The decline in sales affected smaller companies more widely. The accumulation of fixed capital, although higher than the plans initially formulated by companies, has confirmed itself as weak and is expected to decline for the current year. The construction sector grew, although to a lesser extent than in 2022, benefiting both from the acceleration in the completion of extraordinary maintenance works on homes recorded in the last part of the year in view of the gradual reduction of tax incentives, and from the progress of the expenditure for the implementation of the interventions of the National Recovery and Resilience Plan (PNRR); real estate transactions decreased in connection with the increase in interest rates. In the tertiary sector, activity slowed down, affected by the trend in consumption; tourist presences have remained at high levels in historical comparison, thanks to the marked growth in foreign visitors; airport passenger traffic has surged beyond pre-pandemic levels; port movement is stable.
The economic results of companies in 2023 were only slightly affected by the economic slowdown and the increase in interest expenditure; Liquid assets decreased, although they remained at historically high levels. The decline in bank loans to businesses, already underway since the end of 2022, has worsened; the contraction affected all sectors of economic activity and size classes, being more marked for smaller companies. The decline in credit was also influenced by the large advance repayments induced by the rise in interest rates.
The job market
In 2023, employment dynamics slowed significantly, being only weakly positive and lower than the national average. The trend was more favorable in the services sector, especially in the sectors connected with tourism, and in construction, compared to a decline in industry. The expansion of the employed component continued, which as in the rest of the country was supported in the private sector by permanent contracts, while the number of self-employed workers began to decline again. In a context in which companies continued to encounter difficulties in finding manpower, the supply of labor recorded a contraction, mainly attributable to the decline in the working-age population. Looking ahead, demographic forecasts outline a challenging picture for maintaining the workforce in the region at current levels.
In 2023, the number of inactive people due to discouragement about the possibilities of finding a job and the number of people looking for work have reduced. The unemployment rate fell more intensely than in Italy. Wages in the private sector, whose levels in the region show on average a negative gap compared to the rest of the country, have recorded a trend significantly lower than inflation in the last two years, as in Italy.
The families
On average in 2023, the income of Marche families grew in nominal terms, but purchasing power reduced due to the increase in prices. Consumption has been affected and, despite completing the recovery compared to pre-pandemic levels, has slowed down. The inflation dynamic, still particularly strong at the beginning of the year, then progressively weakened, reaching below one percentage point in December. The distribution of family spending in the region is less unequal than the Italian average and the incidence of absolute poverty is more contained, despite the presence of slightly higher poverty threshold values than in the country.
The credit provided by banks and finance companies to families in the Marche region has decreased, also in connection with the decline in loans for the purchase of homes. The flow of new mortgages contracted markedly; the demand for financing was slowed down by the further increase in interest rates. Consumer credit continued to grow, but with less intensity than the previous year.
The credit market
In 2023, bank loans disbursed to customers residing in the Marche region significantly reduced, more than the national average. Household demand for bank loans has decreased; for businesses, the request for financing remained weak during the year, reflecting the lower financial needs linked to investments while the increased debt burden made the renewal of maturing debts less convenient. The quality of credit to customers resident in the region remained at historically low levels.
Bank deposits from families and businesses in the Marche region decreased: the contraction in current accounts was only partially offset by the growth in savings deposits, which benefited from the rise in remuneration. The market value of securities in custody has increased sharply thanks to the huge inflow of resources into bonds, in particular Italian government bonds.
In the regional banking system, the downsizing of the bank branch network continued, especially by large national intermediaries; nevertheless, the spread of branches in relation to the population still remains high compared to Italy.
Decentralized public finance
In 2023, the expansionary dynamics of primary spending by local authorities in the Marche region continued. On the healthcare side, which represents the main item of current expenditure in the Marche Region, we can see short-term critical issues linked to the retirement of a significant number of professional figures. The capital component, which offered the largest contribution to spending growth, was driven by fixed investments, supported in particular by the progress of works financed by the PNRR. In 2023 the non-financial collections of the territorial authorities of the Marche grew, mainly due to the dynamics of the regional ones. The debt, at a per capita value lower than the national average, continued to decline, more intensely than the national trend, continuing the reduction underway since 2013.
