--ISAE: Italy Apr producer confidence index 96 vs March 95
--ISAE: Italy's Apr adjusted orders level -7 vs -8 in March
--ISAE: Italy's Apr adj foreign orders -9 vs March's rev dn -6
--ISAE: Italy's Apr adj output outlook +20 vs +17 in Mar
--ISAE: Italy's Apr adj price outlook +8, unchanged on March
--ISAE: Italy's Apr adj industrial stocks +3 vs +1 in March
--ISAE: Producer confidence rises on brighter output outlook
--ISAE: Producer confidence rises for second month in a row
--ISAE: Italy's foreign orders weakest since August 1999

Rome, June 4 (BridgeNews) - Italy's producer confidence index rose in April to 96 from 95 in March, the second consecutive rise, as sentiment improved on the short-term prospects for output, according to a survey released Monday by Istituto di Studi e Analisi Economica (ISAE). However, producers saw only a slight improvement in the current level of orders, while assessments on foreign demand plummeted to a 20-month low.
* * * Companies saw no change in the outlook for selling prices, which have been moderating since last autumn, ISAE said.
Firms in the survey said the output trend was on a rise for the third consecutive month, hitting a +20 seasonally adjusted reading on the index from +17 in March.
This is still lower than January and considerably down on the average level last year. It also appears to contradict a number of forward-looking surveys that point to a bad performance for the industrial sector in April and May.
However, while official data showed manufacturing output weakening in the first two months of the year, it rose an unexpectedly strong annual 3.2% on in March.
Despite the positive Italian business attitude on production, overall orders remained weak, with ISAE's April index showing only a slight rise to -7 in the index compared with -8 in the previous month.
And the reading for foreign orders slid to -9, the lowest level since August 1999, when they hit -13. ISAE says foreign orders have been falling more or less steadily since March 2000, going into negative numbers this March, for the first time since the end of 1999. March's orders sub-index was -6, a downward revision from an original -5.
The latest official figures on Italian industrial orders disappointed economists, falling by an annual seasonally adjusted 5.4% in March, against expectations of a modest rise.
Firms in the survey reported a rise in their finished product inventories with the seasonally-adjusted balance coming in at +3, a rise on March's +1, and in contrast to negative readings for the whole of 2000. Finally, the selling price component of the index held steady over the next 3-4 months, a halt in the slide indicated in surveys starting November last year.
Producer price inflation rose by 4.3% on the year in April on higher international oil prices, according to national statistics body ISTAT. However, economists saw this as a one-off increase and expected it to continue declining from the 6.8%-high of October 2000.
The second consecutive up-tick in Italy's producer confidence comes as domestic product growth slowed to a quarter-on-quarter increase of 0.7% in the first three months of the year from 0.8% in the last quarter of 2000. The government revised down its full-year 2001 growth forecast to 2.5% from 2.9% in early April, but some economists believe this could be over-optimistic.
A bounce back in optimism among Italian firms contrasts with a general deterioration of business sentiment across the euro-zone, where growth is also weakening. The EU Commission's business climate indicator slipped for the fourth consecutive month in April and there's no sign of a let-up in the pessimism. Last week in France, Europe's second largest economy and considered until now as the region's most robust, the INSEE business sentiment index showed a further slide in May.
ISAE, controlled by the Italian Treasury, is one of Italy's leading economic think tanks. The ISAE survey, which canvasses the views of 4000 companies, is the most comprehensive monthly report of Italian producer expectations. The April report was conducted throughout April and during the first half of May.