Italy's industrial production saw an unexpected uptick in June, rising by 0.2% compared to the previous month, according to data released on Wednesday.
This modest increase offers a glimmer of hope for the country's beleaguered manufacturing sector, which has faced prolonged challenges and had delivered disappointing results in May.
The latest figures defied market expectations, with a Reuters news agency poll of seven economists forecasting a 0.1% decline for the month. The positive surprise may suggest the beginning of a gradual rebound, though the improvement remains tentative.
However, when viewed on an annual basis and adjusted for calendar effects, industrial output still contracted by 0.9% in June, following a similar year-on-year drop of 1.0% in May, according to Italy’s national statistics office, ISTAT. These figures underline the persistent weakness in the sector, despite the slight month-on-month gain.
According to ISTAT, June’s month-on-month increase in industrial production was broad-based, benefiting all major sectors except for consumer goods.
Despite this positive development, the overall outlook for industrial output in the eurozone’s third-largest economy remains uncertain.
Data showed that production in the second quarter rose by only 0.1% compared to the previous quarter, and over the first half of the year, it declined by 1.1% compared to the same period in 2024.
“Industrial production in Italy has likely reached a bottom. However, a clear recovery is not imminent,” said Paolo Pizzoli, senior economist at ING.
Preliminary figures released last week revealed that Italy's economy contracted by 0.1% in the second quarter compared to the first, an unexpected decline that may signal the initial effects of rising US tariffs and mounting uncertainty in global trade.
Earlier this year, in April, Prime Minister Giorgia Meloni’s government revised its growth forecast for 2025 downward, cutting it in half to 0.6%. This updated projection aligns closely with the expectations held by most economic analysts.
Despite the manufacturing sector contracting for the 16th consecutive month in July, a recent survey of purchasing managers offered tentative signs of stabilisation.
The data, released last week, suggested that while the sector remains under pressure, the pace of decline may be easing, hinting at a potential turning point after a prolonged period of weakness.