Don’t Blame German Carmakers for Italy’s Industry Woes

Italy’s economy shrank in the third quarter and industrial production plunged in November. It’s tempting to blame this on the travails of Germany’s auto industry, but Bloomberg Economics’ supply-chain analysis shows that the value of goods produced in Italy to meet demand from German carmakers is too small to explain the weakness. A lot may have had to do with political uncertainty, which had a fallout on hiring and investment.