In May, Italian business confidence fell more than expected, to its lowest level since October last year. The headline figure dropped from a downwardly revised 102.6 to 101.3, while the consensus was looking for only a slight decline. Sentiment about both the current situation and outlook deteriorated in May. Orders fell from -18 to -20 and the orders outlook dropped from 15 to 12; production weakened from -15 to -16 and production outlook fell from 13 to 11. In both the last quarter of 2010 and the first quarter of 2011, the Italian economy barely grew (both 0.1% Q/Q), clearly underperforming the core EMU countries. As business confidence is now weakening, it sparks fears that the Italian economy might fall back into recession as the recovery in the core EMU countries is losing some momentum.