There Italian industrial production fell unexpectedly in April, by -1% m/m (-2.9% y/y) from a previous -0.5%, leaving the industrial sector on course for a fifth consecutive quarterly contraction. This was stated by Andrea Volpi, economist of Intesa Sanpaoloin a note following this morning’s Istat data.
Italian industrial production has not grown for four months and the trend change has been negative for 15 months. Accordingly, the production level is now -8.8% below the peak reached in April 2022.
“We suspect that the recent underperformance may be partly due to the German slowdown which is reflected on Italian producers, but there could also be internal reasons – we read in the report – In particular, in addition to a still weak demand for goods, the delays linked to the publication of the implementing decrees of Transition 5.0 plan they are probably slowing down the production of capital goods.”
Overall, Intesa Sanpaolo believes that both the industrial and construction sectors, the latter affected by the end of incentives for building renovations, can slow down growth in the 2nd quarter, supporting its forecast that GDP could slow to 0.1% q/q from 0.3% q/q. In any case, he estimates that the economy will regain momentum in the second half of 2024.
