ITALY DATA: IP Broadly in Line in May, Eases After Recent Strength

Italy industrial production pulled back -0.3% M/M sa in May (-0.2% cons), after a downwardly revised 0.4% M/M in April (0.5% initial). The reading is broadly in line with expectations for some payback after three consecutive increases, which had taken the index to its highest level since March 2024, so the monthly drop isn't too concerning. For the most part, the fall was driven by reversals lower in production, with the exception of energy which rebounded after recent weakness.

• Intermediate goods look to have led the monthly drop, reversing lower to -0.8% M/M (0.7% prior, revised down 0.1ppt).
• Consumer goods fell -0.5% M/M (0.0% prior, revised up 0.4ppt), led by durables (-2.5% after +2.9%) and nondurables (-0.5% after -0.2%). Capital goods saw a much softer drop of -0.1% M/M (0.7% prior, revised down 0.3ppt).
• Energy was the main offsetting factor, with production rebounding 4.6% M/M, though after three falls (-0.9% Apr, -1.1% Mar, -5.3% Feb).
• 3M/3M IP growth accelerated to 0.9% 3M/3M (0.1% prior), as last November's strong monthly increase falls out of the calculation. Here, capital and intermediate goods continue to drive growth, while consumer goods and energy continue to push down on the rate.
• On an annual basis, IP grew 1.1% Y/Y wda in May, unchanged from April after a 0.2ppt downward revision. Here, the largest growth rates were seen in transport equipment (11.6% Y/Y), pharmaceuticals (3.5%) and chemicals (3.3%). These were partly offset by weakness in textiles (-6.6% Y/Y), "other manufacturing" (-3.8%) and electrical/non-electrical domestic appliances (-2.6%).