| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Month over Month | -0.6% | -1.2% | 1.1% | 1.2% |
| Year over Year | -3.4% | -2.1% | -1.5% |
Highlights
Industrial production was surprisingly weak at the start of the year. A 1.2 percent monthly drop was the third decrease since September, double the market consensus and fully unwound a marginally larger revised rise in December. Annual workday adjusted growth slumped from minus 1.5 percent to minus 3.4 percent.
Weakness was relatively broad-based with only intermediates (0.0 percent) and energy (2.5 percent) amongst the main component groups not registering a monthly decline. Consumer non-durables fell 1.5 percent, capital goods 3.6 percent and consumer durables fully 4.2 percent.
The latest setback puts the 3-monthly change in overall industrial production at minus 0.9 percent and leaves January output also 0.9 percent below its fourth quarter average. The goods producing sector fell into recession in the third quarter of 2023 and on current trends looks likely to suffer a fourth successive contraction in the current quarter. Today's update trims the Italian RPI to minus 21 and the RPI-P to minus 10. Both measures indicate a limited degree of overall economic underperformance, albeit with the former biased down more sharply by particularly soft prices.
Weakness was relatively broad-based with only intermediates (0.0 percent) and energy (2.5 percent) amongst the main component groups not registering a monthly decline. Consumer non-durables fell 1.5 percent, capital goods 3.6 percent and consumer durables fully 4.2 percent.
The latest setback puts the 3-monthly change in overall industrial production at minus 0.9 percent and leaves January output also 0.9 percent below its fourth quarter average. The goods producing sector fell into recession in the third quarter of 2023 and on current trends looks likely to suffer a fourth successive contraction in the current quarter. Today's update trims the Italian RPI to minus 21 and the RPI-P to minus 10. Both measures indicate a limited degree of overall economic underperformance, albeit with the former biased down more sharply by particularly soft prices.
Market Consensus Before Announcement
Production in January is expected to fall 0.6 percent on the month following a better-than-expected 1.1 percent rise in December.
Definition
Industrial production measures the physical output of the nation's factories, mines and utilities. Construction is excluded. Approximately 4,100 companies provide data on more than 8,000 monthly flows of production.
Description
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.
