|Month over Month||0.3%||0.9%||-0.3%|
|Year over Year||3.0%||0.1%|
Goods production (ex-construction) was surprisingly robust in May. A 0.9 percent monthly jump was the steepest since June 2014 and, following an unrevised 0.3 percent decline in April, lifted annual workday adjusted growth from 0.1 percent to 3.0 percent, easily its best performance since output started to expand again late last year.
The May advance was reassuringly broad-based with capital goods up fully 2.3 percent on the month, consumer goods 0.7 percent firmer and consumer goods 0.6 percent higher. Energy (1.7 percent) also made solid ground.
Industrial production has now expanded in three of the last four months and average output in April/May was a tidy 0.7 percent above its first quarter mean. Recent PMI and Istat surveys have shown a clear improvement in manufacturing activity and confidence in recent months and in the absence of an unexpectedly sharp setback in June, the goods producing sector may well have helped to secure the largest quarterly rise in Italian real GDP since the Great Recession. That said, total output still has a very long way to go to reclaim its pre-recession highs.
Industrial production measures the physical output of the nation's factories, mines and utilities. Approximately 4,300 companies provide data on more than 9,000 monthly flows of production.
Investors want to keep their finger on the pulse of the economy because it usually dictates how various types of investments will perform. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers more subdued growth that will not lead to inflationary pressures. By tracking economic data such as industrial production, investors will know what the economic backdrop is for these markets and their portfolios. Like the PPI and the orders data, construction is excluded from the data. This report has a big influence on market behavior. In any given month, one can see whether capital goods or consumer goods are growing more rapidly. Are manufacturers still producing construction supplies and other materials? This detailed report shows which sectors of the economy are growing and which are not.
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