Italy: Industrial activity dips in March
Industrial output declined 0.6% in month-on-month seasonally-adjusted terms in March, which was a deterioration from February’s 0.2% decrease. The downturn largely reflected contractions in mining and quarrying and electricity, gas, steam and air conditioning production. However, manufacturing output declined at a more moderate rate.
On an annual basis, industrial production fell at a more pronounced rate of 3.2% in March (February: -2.3% yoy). Moreover, the trend pointed down, with the annual average variation of industrial production coming in at minus 0.4%, contrasting February’s plus 0.2% reading.
Commenting on the outlook, Paolo Pizzoli, senior economist at ING, stated:
“A third consecutive month of contraction confirms the ongoing soft patch in industry, with a divergence between consumer goods and investment goods. We believe this is related to two ongoing factors: a re-composition of consumer demand away from goods and toward services, and the impact of the inflow of European Recovery and Resilience funds, which are activating private and public investments. Looking ahead, based on business confidence and PMI data, a short-term recovery in industrial production does not seem likely, at least in the short term.”