|Month over Month||-0.1%||-1.1%||0.9%|
|Year over Year||0.9%||-0.3%||3.0%||3.1%|
The goods producing sector had a poor June as output (ex-construction) fell a surprisingly sharp 1.1 percent on the month. Following an unrevised 0.9 percent bounce in May, June's setback saw annual workday adjusted growth slump from 3.1 percent to minus 0.3 percent, its worst performance since January.
Overall production was hit by monthly declines in all of the major subsectors. Hence, consumer goods were down 0.8 percent, capital goods 1.3 percent and intermediates 1.7 percent. Energy also contracted 1.0 percent.
Despite June's drop, second quarter industrial production was still 0.4 percent above its first quarter mark when it was up a marginally firmer 0.5 percent. Accordingly the signs are that goods production provided another boost to real GDP growth last quarter which, with services apparently expanding at a respectable pace, should have been enough to ensure that the Italian economy expanded for a second successive quarter.
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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