Italy Industrial Output Jumps, Boosting Growth Expectations

  • January production rises 1.9%, more than double the estimate
  • Fourth-quarter unemployment rate was unchanged, down from 2014

Italian industrial output rose more than twice the economists’ forecast in January, signaling that the pace of economic growth may accelerate in the coming months.

Production increased 1.9 percent from December, which registered a 0.6 percent fall, national statistics bureau Istat said in a report issued Friday in Rome. The median of 14 estimates in a Bloomberg survey called for a 0.7 percent rise in the first month of 2016. On an annual, work-day-adjusted basis, production rose 3.9 percent, Istat said.

The output’s monthly increase in January was the biggest since August 2011, according to data compiled by Bloomberg.

As a limited revival in consumption more than offset the impact of falling net exports and investments that failed to rise, GDP is expected to increase by 0.1 percent in the three months through March, the same as in the previous quarter, Istat said earlier this week.

First Quarter

The production report is “excellent news as it supports expectations of an economic expansion in the first quarter,” said Loredana Federico, an economist at UniCredit Bank AG in Milan. “Looking ahead and given both the persistent weakness in global demand and the financial-market turbulence, decline in coming months can’t be ruled out.”

Italian executives remain pessimistic about the economic outlook. Business confidence fell in February for the fourth straight month amid concerns that the gross domestic product may fail to pick up after rising last year at a progressively slower pace. 

The country’s unemployment rate was unchanged in the fourth quarter from the previous three months at 11.5 percent, the statistics bureau said in a separate report on Thursday. That compares with a high of 12.8 percent at the start of 2014, but it is still almost twice the rate it was in mid-2007, when the country entered recession.

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