Italy’s industrial production disappoint

Italy's industrial production surprised to the downside in January, contracting 0.7% mom vs. our and consensus expectation for a slight gain.
 
While disappointing, today's data is no reason to worry, as it probably reflects a technical correction after two consecutive increases. 

On a less volatile 3M/3M basis, IP recorded the first (mildly) positive reading in one year. The trend in industrial activity remains upwards, both in Italy and in the rest of the eurozone.

The data details show that consumer goods output expanded 0.1% mom, with durables at -1.1% and non-durables at +0.3%. The production of intermediate goods contracted 0.2% mom, capital goods output was down 1.8%, while energy recorded a 0.5% increase.
 
Unicredit notes as follows on Tuesday:

• Looking beyond the monthly volatility of hard data, the upward trend of survey indicators suggests that growth momentum in Italy points north, supported by low oil prices, a weaker currency and increasingly favorable financial conditions for firms and households.
• Today's IP weakness is likely to be reversed in the coming months, and we remain convinced that 1Q15 will show a return to positive GDP growth.