Italy: Industrial activity records largest drop in two years in December
Latest reading: Industrial output nosedived 3.1% in month-on-month seasonally adjusted terms in December, which contrasted with November’s 0.3% increase. The result marked the worst reading since January 2022. Looking at the details of the release, the drop was chiefly driven by a sharp decline in manufacturing output. Moreover, electricity and gas supply lost momentum. On the flipside, mining output gained some steam.
On an annual basis, industrial production plummeted 6.9% in December, which was significantly greater than November’s 1.8% fall and marked the worst result since July 2020. Accordingly, the trend pointed down, with the annual average variation of industrial production coming in at minus 3.4%, down from November’s minus 3.0%.
Panelist insight: Commenting on the outlook, ING’s Paolo Pizzoli stated:
“Looking ahead, the macro environment isn’t quite conducive to an imminent recovery in industrial activity. Order books as reported by business surveys have been subdued over the last few months. […] Add to this growing concern about a possible new round of US tariffs on EU exports, and you have the perfect mix for a continuation of manufacturing struggling over the next few months. The recent acceleration in gas prices is not helping either; if protracted, it might temper the tentative supply-side push impulses we had noticed in some energy-intensive sectors over the second half of 2024.”