Italy’s Jobless Rate Falls Slightly Before Expected Slowdown

(Bloomberg) -- Italy's unemployment rate fell slightly in May as the labor market braces for an expected economic slowdown in the euro region.

Unemployment dropped to 11.5 percent from a revised 11.6 percent in April, national statistics agency Istat said Friday in Rome. The median estimate in a Bloomberg survey of six analysts called for 11.7 percent in May.

The jobless drop comes as Italy awaits the fallout from the U.K.'s decision to leave the European Union.

Industrial production in Italy likely fell last month, the country's business lobby Confindustria said on Tuesday. It added that the rise in the manufacturing confidence recorded by Istat in June does not take into account the effects of the U.K. vote to exit the European Union as the survey was conducted in the first half of the month. 

“A worsening in coming months is to be expected,” Confindustria said.

Growth Outlook

There will be a change in the Italian growth outlook as a result of last week's U.K. referendum, Finance Minister Pier Carlo Padoan said without elaborating in a June 18 interview with Corriere della Sera. The government currently projects gross domestic product will expand 1.2 percent this year.

In the financial industry, Unione di Banche Italiane SpA announced plans this week to simplify its structure as part of a five-year strategy that also calls for job cuts and branch closures. The Bergamo-based lender plans to close about 280 branches by the end of 2019 and eliminate 2,750 positions, mainly through voluntary programs. At the same time it will hire 1,100 staff.

A last-minute accord on job cuts at Meridiana SpA with worker unions earlier this week paved the way for the struggling airline's partnership with Qatar Airways. The Italian Transport Ministry said that the Italian carrier will lay off less than half of the almost 1,000 employees originally proposed to bring Qatar Airways back to the negotiating table.

There were 21,000 more people employed in May, Istat said Friday. Youth joblessness was unchanged in the month at 36.9 percent.

Istat originally reported an unemployment rate at 11.7 percent in April.

--With assistance from Giovanni Salzano To contact the reporter on this story: Lorenzo Totaro in Rome at ltotaro@bloomberg.net. To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Kevin Costelloe, Chiara Vasarri