Italy: Industrial output growth slows in July
Industrial output expanded 0.8% in month-on-month seasonally-adjusted terms in July, which was down from June’s 1.1% increase. July’s downturn was primarily driven by a deterioration in mining and quarrying, and electricity, gas, steam and air conditioning production. However, manufacturing production accelerated.
On an annual basis, factory output rose at a softer pace of 7.0% in July (June: +13.8% yoy), the worst result since February. Meanwhile, annual average industrial production growth rose to 8.9% in July (June: +7.3%). This signals an improving trend in the industrial sector.
On the outlook, Dr. Loredana Maria Federico, chief Italian economist at Unicredit, commented:
“We are projecting a slowdown in manufacturing activity in the current quarter due to declining support from global demand (global trade growth probably peaked in the summer) and the persistence of supply problems. Still, we do not see scope for an outright contraction in manufacturing production in Q3 […]. Furthermore, the impact of supply problems in Italy, especially on the car sector, so far appears to be more limited than it has been in other countries (such as Germany). For the coming quarters, one of the main concerns will be that supply-chain constraints, along with rising raw-material costs, might last well into 2022, slowing the recovery in industry.”