Italy’s industrial production posts a surprise fall in June

Industrial production in Italy fell for the second straight month in June, contrasting market expectations for an increase in output. However, this increased the risk that the country´s gross domestic product might be set to slow more sharply than had been expected, reflecting recent weak orders both domestically and from abroad, economists said.

The calendar-adjusted industrial production index dropped 1 percent year-on-year following 0.6 percent fall in May. Economists had expected a 1 percent gain, data released by statistics agency ISTAT showed Friday. The latest decline was the biggest since January 2015, when production fell 2.1 percent.

Production dropped 5.5 percent in the energy sector, 2.1 percent in consumer goods and 0.3 percent in capital goods segments. Intermediate goods output grew 0.8 percent. Compared to the previous month, industrial production decreased 0.4 percent after 0.6 percent slump in May. Economists were looking for a 0.3 percent gain.

Also on a quarterly basis, output of capital goods decreased by 2.4 percent, that of energy products by 2.5 percent and that of consumer goods by another 0.6 percent. In addition, Barclays cut its estimate for second-quarter growth to 0.1 percent from 0.2 percent previously. ISTST will provide preliminary gross domestic product data for the quarter on Aug 12, Bloomberg reported.

Meanwhile, the International Monetary Fund cut its economic growth forecast for Italy to less than 1 percent this year. Further, the Bank of Italy attributed a lower global trade to the negligible, yet limited impact of the UK voters’ decision to exit the European Union.