ITALY DATA: Underlying IP Momentum Sluggish, But Surveys Suggest Improvements

Italian industrial production rebounded in September, rising 2.8% M/M, well above the 1.5% consensus. August’s already weak reading was revised down to -2.7% (vs -2.4% initial). Stripping out the monthly volatility, which may be a function of seasonal factors, IP momentum remains sluggish. That said, sentiment data points towards a gradual recovery in the months ahead.

• On a 3m/3m SWDA basis, production was down 0.5% in September, after a 0.6% fall in August.
• The manufacturing PMI was essentially neutral in October, printing at 49.9 after 49.0 in September and 50.4 in August. Meanwhile, ISTAT’s manufacturing confidence series rose to a 17-month high of 88.3 in October.
• On a single-month basis, the manufacturing component of IP (which has a weight of around 90%) rose 1.4% M/M (vs -1.9% prior), with mining and quarrying (12.0% M/M) and electricity, gas, steam and air conditioning supply (8.3% M/M) seeing much larger sequential changes.
• Within manufacturing, rebounds were seen in all major categories other than textiles (-4.4% M/M vs 3.6% prior).