What's going on?

According to construction and manufacturing survey data released on Friday, the UK�s building on while Italy�s, comparatively, crumbling.

What does this mean?

The surveys in question ask what managers are seeing in their businesses by way of new orders and spending patterns, and their overall confidence � effectively giving investors an ear to the ground with which to keep tabs on economic growth (or lack thereof). Building and manufacturing activity in the UK�s largely adding floors, albeit at a slower rate than in previous months � which doesn�t knock the Bank of England (BoE)�s stance that the economy�s running at full capacity.


The water keeps on rising in Italy. Manufacturing activity is actually on the decline, thanks to fewer new orders and declining demand for exports � adding insult to injury after data last week showed that the Italian economy didn�t grow at all in the third quarter.

Why should I care?

For markets: The UK�s coming up to a tightrope.

Although activity was up in the UK, optimism and confidence were decidedly downbeat. One concern is that when the country leaves the European Union (EU), it�s anyone�s guess what happens to companies� access to supplies of products they want from the rest of Europe (like car parts or wine), or what�ll happen to Europe�s demand for products and services from the UK. Not to mention the ramifications on prices for these products, both ways. That uncertainty�s likely a reason why the BoE chose not to make borrowing money more expensive, leaving interest rates unchanged on Thursday.

The bigger picture: Italy�s sour grapes.

Italy�s currently wrangling with the EU over its high spending plans, which remain despite its debt-riddled economy (its debt is a third larger than the size of its entire economy). Zero economic growth, coupled with declining manufacturing activity, makes Italy�s proposed budget appear very optimistic indeed. But the Italian government says that the country�s economic growth would crescendo if it were simply allowed to spend more (borrowed) money.