Italy: Dismal industrial production numbers - ING

Paolo Pizzoli, Senior Economist at ING, notes that the Italy’s industrial production contracted for the second month in a row as it fell by 0.5% in February MoM (-1.8% in January) in SA terms and by 2.5% YoY in WDA terms (+4.4% YoY in January).

Key Quotes

“The contraction involved consumer goods (-2.4% MoM), intermediate goods (-1.5% MoM) and investment goods (-1% MoM), with only energy in expansion (+8% MoM).”

“February data shows that the risks of a softening of the ongoing recovery are rising. With domestic and external order books filling at a decent rate until December and with expected production still pointing north, we do not expect a protracted production setback in the short run.”

“Today's release adds downside risks to our 0.4% QoQ forecast for 1Q18 GDP growth. While PMIs look still fully compatible, production data are making that call a bit stretched.”