Italy Product and Internal Demand

Between 1975 and 1991 the income produced by Italy it increased overall, at constant prices, by almost 60% (with an average annual growth rate close to 3%; table 16); in per capita terms, the increase exceeded 50%, affected by an average annual growth of the resident population of less than 0.3%.

Particularly sustained, in the context of domestic demand, was the increase in expenditure for the consumption of goods and services by households, more than two thirds higher in real terms in 1991 than in 1975. Within this, significant is was the change in composition, reflecting, above all, as well as variations in preferences, of the higher level of well-being: in particular, the relative decrease in food consumption, which decreased (including tobacco) from almost one third to one fifth of total expenditure in current values, were accompanied by a slight increase in other traditional consumption (for clothing, housing, furniture and furnishings) and a substantial increase in expenditure for transport and communications, health services, recreation, education and culture (table 17).

The evolution of gross investments during the period was particularly variable, not only in the highly cyclical component of the change in inventories, but also in that of fixed investments, which increased, on average, at an annual rate of 2.1%.

Among the latter, the development of accumulation in machines, equipment and means of transport was noteworthy, while the construction component was decreasing in relation to the product, especially that in homes, which also decreased in real terms until 1989 (tab. 18). The growth in investments in machinery and equipment – especially high in the late 1970s as well as in 1984, after the recession of the early 1980s – is largely linked to the extensive process of productive restructuring and renewal of the capital stock that it affected the system of Italian companies, in particular medium and large ones.

Employment and labor productivity. Employment was also affected by the industrial restructuring process, which began in the late 1970s. Without ever decreasing, if not for a few tens of thousands of units in 1982 and unlike in other European countries, the total number of employees increased between 1975 and 1991 by about 9.5% (table 19), almost two thirds of the increase recorded by the labor force is mainly due to the increase in the female activity rate, which is still lower than that of the major industrialized countries. The result was a gradual and strong increase in unemployment, common to all regions of the country until 1984-85 and then especially concentrated in the southern ones.

While, on the average of the entire economy, unemployment has been around 12% of the total workforce since 1987, in the South and on the islands it has continued to rise, exceeding 21% in 1989 and increasingly involving the women (about a third unemployed, compared to 10% in the central-northern regions) and that of young people looking for a job (equal to 45% of the workforce in southern and island Italy It should also be noted that the increase in unemployment was contained, especially in the first half of the 1980s, by the strong expansion of the use of the wage supplementation scheme: the integrated hours, which more than doubled between 1974 and 1975 (from 160 to 350 million) and fluctuated around an average value of around 300 million over the next five years,

To the continuation of the agricultural exodus (uninterrupted during the second post-war period), which brought from over 3 to less than 2 million employed in agriculture (now equal to less than 10% of the total), were added, as has been said, the effects of the productive restructuring that has affected the industrial sector. Between 1980 and 1987 the number of employees in this sector fell from 7.7 to 6.7 million.

In terms of standard work units (“ equivalent employees ”) – which take into account both the employment of non-resident foreign workers, and the amount of double work, and are net of employees in layoffs – the reduction is in this period amounted to 1,110,000 units, concentrated in medium and large enterprises in the processing industry. The absorption of labor by the tertiary sector was therefore exceptional, especially during the 1980s: between 1980 and 1991, the growth in employment in market services led to an overall increase of approximately 2,650,000 units of work; albeit to a lesser extent than in the 1970s, it increased considerably (by almost 650.

The reduction of labor input in manufacturing industry was accompanied by a high recovery in productivity, which almost doubled over the period under review. The increase has been particularly lively since 1983, coinciding with the resumption of capital accumulation and the completion of the process of modernization of industrial enterprises. The increase in output per work unit in the agricultural sector was also significant, while only in recent years has there been a recovery, albeit modest, in construction.

In the tertiary sector, on the other hand, the great increase in employment was matched by a substantial stagnation of the unitary product, higher only by a few percentage points, in 1990-91, than the level reached in 1980: not only in the public sector, but also in the average of the private sector, the relative inefficiency of services constitutes one of the main obstacles to a balanced and competitive development of the Italian economy. However, the important stabilizing role played by this sector should still be remembered, which more than offset the contraction in agricultural and industrial employment in the 1980s, allowing it to maintain a moderate rate of expansion in overall employment.

Italy Product and Internal Demand