Weak Industrial Output in Italy

By Antonella Cinelli

ROME (Reuters) – Italian industrial output was much weaker than expected in December, falling 3.1% from the previous month, indicating deepening issues in the country’s stagnant economy.

December marked the biggest monthly decline in production since January 2022, according to ISTAT. The data was below all forecasts in a Reuters survey of 16 analysts, which suggested a slight 0.2% decrease.

The GDP in the eurozone’s third-largest economy stagnated for a second consecutive quarter at the end of 2024, ISTAT reported last month.

ING senior economist Paolo Pizzoli remarked, “Prospects for a swift and sustained recovery appear bleak” following the recent industrial production figures.

Factors like geopolitical tensions, the possibility of U.S. trade tariffs, and complications in deploying EU COVID-19 recovery funds cloud the economic outlook.

On a work-day adjusted year-on-year basis, industrial output fell 7.1% in December. This marked the steepest decline out of 23 consecutive annual drops, following a 1.6% decline in November.

December’s results conclude another weak year for Italian industry, with work-day adjusted output down 3.5% in 2024, following a 2.0% decrease in 2023.

Italian economic think tank Prometeia noted that the industrial sector faces serious challenges this year, particularly in car manufacturing and textiles.

For the whole of 2024, the Italian economy experienced 0.5% growth compared to the previous year, adjusted for working days, as per ISTAT’s flash estimate on January 30.

The statistics bureau plans to release non-workday-adjusted growth data for 2024 on March 3.

Though this might be stronger than the flash estimate due to more working days, it is still projected to fall short of the government’s 1% forecast. Most economists predict growth around 0.7%, significantly lower than Rome’s official target of 1.2%.