Industrial production contracts faster in January

Latest reading: Industrial production fell 0.6% in seasonally adjusted month-on-month terms in January, following a 0.5% fall in the prior month. Relative to the previous month's figures, the reading for manufacturing softened in January (-1.4% in seasonally adjusted month-on-month terms vs +0.1% in December). In contrast, readings picked up for mining and quarrying (+2.7% vs +1.4% in December) and electricity, gas, steam and air conditioning (+4.5% vs +0.2% in December). In annual terms, industrial production fell 0.5% in January, following a 2.8% rise in the previous month.

Panelist insight: Commenting on the outlook, ING’s Paolo Pizzoli said: “Developments in industrial production for the rest of the year remain highly uncertain. Strong links with the German economy could eventually support Italian industry as Germany rolls out its infrastructure and defence investment plans, but evolving energy market tensions linked to the Middle East conflict are adding both supply and demand-side risks. February business surveys have not yet captured these pressures, instead pointing to flat production and steady orders, but the March data may tell a different story. After an unexpectedly strong 0.3% quarterly GDP rise in late 2025, we expect growth to cool in the first quarter of 2026.”

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