Italy: Industrial production shrinks in November
January 13, 2021
Industrial output decreased 1.4% in November on a month-on-month, seasonally-adjusted basis. The reading contrasted October’s 1.4% rise.
November’s drop reflected a downturn in the manufacturing sector as well as a sharper contraction in the utilities sector which more than offset an improvement in the mining and quarrying sector. Within the all-important manufacturing sector, the largest fall were recorded in the production of textiles.
On an annual basis, industrial production contracted 4.2% in November in calendar-adjusted terms, following October’s less pronounced 1.9% drop. Meanwhile, the annual average variation in industrial production deteriorated from October’s minus 10.8% to minus 11.1% in November.
Commenting on the release, Paolo Pizzoli, senior economist at ING, stated:
“The outlook for December 2020 does not look bright: widespread containment measures in the main European trading partners likely weighed on export flows and, as a consequence, on Italian production. We believe that in 4Q20, the Italian industrial sector was not strong enough to prevent a service sector driven quarterly contraction in GDP in 4Q20. As we suspect that the risks of longer-lasting containment measures are on the rise, both domestically and in the main trading partners, we anticipate a quarterly GDP contraction in 1Q21. Not the best environment for a possible government crisis.”