Italian industrial output much stronger than expected

Rome: Italian industrial output was much stronger than expected in January, jumping 1.7 percent from the month before after four consecutive declines, data showed.

The data was above all forecasts in a survey of 18 analysts which had pointed to a marginal 0.1 percent increase.

It offers some hope that Italy’s recession over the second half of last year, due mainly to a steep reduction of inventories, could be short-lived.

Nonetheless, in the three months to January output in the euro zone’s third largest economy was still down 1.8 percent compared with the August-to-October period, national statistics bureau ISTAT reported.

ISTAT marginally revised up December’s data to show a 0.7 percent monthly fall, previously reported as -0.8 percent.

On a work-day adjusted year-on-year basis, output in January was down 0.8 percent, compared with a forecast of -3.0 percent in a survey, following an unrevised 5.5 percent fall in December.

Industrial production was strong across the board in January, ISTAT said, with output of consumer goods, investment goods, intermediate goods and energy products all rising from the month before. Energy output was particularly strong, surging by 6.4 percent.

Italian gross domestic product fell 0.1 percent in each of the last two quarters of 2018.

The coalition of the anti-establishment 5-Star Movement and the right-wing League which took office in June last year is forecasting 2019 GDP growth of 1.0 percent, broadly in line with last year’s 0.9 percent rate.

However, most economists expect growth to be no more than half that, and some are forecasting a full-year contraction.

Italian industrial output fell by around a quarter during a steep double dip recession between 2008 and 2013, and has recovered only a small part of that during a modest recovery in the subsequent years.