Italian industrial output unexpectedly fell slightly in March due to weakness in consumer goods, data showed today, but analysts said leading indicators suggested a fragile recovery remained on track.
The 0.1 per cent fall in industrial output from February defied analysts expectations for a rise of 0.5 per cent and showed the economy lagging larger neighbours France and Germany, which posted strong output gains in March.
While the year-on-year adjusted gain of 6.4 per cent was the strongest since December 2006 -- coming in just below analysts' expectations of 7.4 per cent -- economists said the monthly decline showed Italy's recovery remained shaky, ahead of the publication of first quarter GDP figures this week.
Production of consumer goods fell by -1.5 per cent in March, cancelling out slight gains in investment goods and intermediate goods of 0.1 and 0.3 per cent respectively.
Output of vehicles -- which makes up over 5 per cent of the index -- was hard hit, tumbling 8 per cent, after the government ended incentives to the auto sector. Car maker Fiat is Italy's largest industrial producer.
A fresh package of €300 million in industrial incentives, which excludes cars, will take affect from April and analysts said this could lift consumer goods production.
Economists expressed surprise that March's figure came in so low, following solid consumer and business confidence figures from ISAE and the Purchasing Managers Index.
Reuters