Italy industry output exceeds outlook, prompting growth hope

Bloomberg

Italian industrial output rose more than economists estimated in July, led by pharmaceuticals and vehicle production, prompting hopes for a renewed recovery after growth stalled in the second quarter.
Production increased 0.4 percent compared with June when it decreased a revised 0.3 percent, statistics agency Istat said Tuesday in Rome. The median estimate in a Bloomberg survey of 23 analysts called for a 0.2 percent gain. On an annual, work-day adjusted basis industrial production was down 0.3 percent in July.
“The third quarter began with a positive surprise, likely a rebound after the weak data in June,” Loredana Federico, lead Italy economist at UniCredit Bank in Milan, said after the data were released. “July’s modest expansion improves the outlook for industrial output contribution to GDP in the period.”
Premier Matteo Renzi is seeking to spur growth after gross domestic product in the euro region’s third-biggest economy was unchanged in the three months through June. A business manufacturing confidence gauge dropped last month, reaching a one-and-half-year low and showing executives were increasingly worried about the prospects for orders and production. A referendum on Italian constitutional reforms is expected in November or December, and the outcome could help determine Renzi’s political future.
Pharmaceuticals rose 13.9 percent on a monthly basis in July, while vehicle production increased 4.8 percent.
Finance Minister Pier Carlo Padoan has repeatedly signaled that the government’s official forecast of a 1.2-percent GDP annual growth this year would be revised down when he issues an updated projection this month.