Industrial production (ex-construction) slumped at the start of the year. A 1.9 percent monthly decline was the second steepest since December 2015 and all but reversed a stronger revised 2.1 percent bounce in December. Annual workday adjusted growth was 4.0 percent, down from 5.4 percent last time.
However, the monthly drop was in no small way impacted by a 7.0 percent nosedive in energy output. Elsewhere, the picture was not quite so weak. Hence, although capital goods (minus 1.6 percent) and intermediates (minus 0.9 percent) had a poor period, consumer goods were at least flat. Nonetheless, January's surprisingly poor report left overall production 0.3 percent below its fourth quarter average and warns of a much smaller contribution to first quarter GDP growth. Fourth quarter industrial production was up a solid 0.9 percent versus July-September.
That said, the trend in output remains positive and confidence in Italian manufacturing is at reasonably healthy levels. Any slowdown in activity this quarter should be relatively modest.