Rome, Dec. 19 (Bloomberg) -- Italian consumer confidence fell to its lowest in at least six years in December, a sign concern about the slumping economy may damp holiday shopping. An index based on a monthly survey of 2,000 households by the state-funded Isae institute fell to 106.7 from a revised 109.7 in November. The poll, conducted in the first two weeks of the month, is one of the first monthly measures of European consumer mood. ``I'm trying to save as much as possible because I don't expect the economy to recover anytime soon,'' said Alessandro Spiezia, 58, whose eyeglasses shop in Rome is selling 10 percent fewer frames this holiday season compared with last year. ``I'm only buying necessities.''
Europe's fourth-largest economy barely grew in the third quarter as consumer spending stalled. Italy's biggest manufacturers, Fiat SpA and Pirelli SpA, have announced more than 10,000 job cuts. The economy of the 12 euro nations grew at the slowest pace in almost a decade this year, the European Central Bank said last week. Italian confidence was ``significantly influenced by the grave crisis'' at carmaker Fiat, Isae said in the report. An index measuring expectations for rising unemployment shows consumers more concerned than at any time since 1996. Shoppers' confidence in future economic growth is at its lowest since 1993, Isae said. ``Growth is very slow and everyone feels it,'' said Ernesto Gismondi, chairman of Milan-based Artemide SpA, which makes designer lamps and lighting systems. Job losses at Fiat ``are hurting confidence.''
Christmas Shopping
Slow growth and rising concern about job security will crimp holiday spending, Italy's largest retail groups predict. The Christmas shopping season is typically the busiest time of the year for retailers, with sales in December at least 50 percent higher than in other months, according to Confcommercio retailers' lobby. Gucci Group NV, the world's third-largest luxury goods maker, said today fiscal third-quarter profit dropped 14 percent as sales declined in the U.S., Europe and Japan. Belgian consumers were more pessimistic in December than at any time in a year, a report showed yesterday. Business confidence in Germany, Europe's biggest economy, fell to the lowest in 11 months in December, Ifo economic institute said yesterday. A possible U.S. strike on Iraq may also be fueling pessimism. U.S. President George W. Bush is ready to declare Iraq has violated a United Nations resolution prohibiting weapons of mass destruction, the New York Times has reported. That would clear the way for the U.S. to use force against Iraq. ``People are really worried about terrorism and a possible war with Iraq,'' Artemide's Gismondi said.
Tax Cuts
On Tuesday, Prime Minister Silvio Berlusconi said Italians should feel secure this Christmas because he wasn't ``excessively worried'' about possible terrorist attacks. At the same press conference, Interior Minister Giuseppe Pisanu said the risk of an attack in Italy ``has never been greater.'' To try and boost spending and growth in Italy next year, Berlusconi is cutting taxes by 5.5 billion euros ($5.5 billion) for low earners. An Isae index measuring consumers' outlook for inflation indicated they expect it to accelerate in coming months. The index rose to 16 in December, from 14 the previous month, the first increase since August. //www.quote.bloomberg.com