ISTAT: the car sector collapses by 18.1%, slow down chemistry and pharmaceuticals. They hold work and consumption, but global uncertainties weigh on Italian companies.
A moderate growth GDP and a still solid labor market, but an industrial production in trouble with the car sector which, as always, is the main ballast. The signals of the Italian economy that leave the data released today by Istat are conflicting. May braking for industrial production, after the short parenthesis of April and in the background it remains an uncertain international framework, aggravated by the geopolitical tensions and volatility of US commercial policies, which continue to slow down the global flows of goods.
Istat: in May industrial production down 0.7%, cars in fall
The 0.7% drop in May of Italian industrial production marks a return to negative territory, after the fragile rebound of April. On an annual basis, the drop is 0.9%, against growth of 0.2%. On average March-May, there is however a slight increase of 0.6% compared to the previous quarter, a sign of a partial recovery which however cannot consolidate.
Looking at the different sectors, only energy records growth on a monthly (+0.7%) and annual (+5.3%). All other sectors mark flexions: intermediate goods drop by 1% on month and 2.7% on year, consumer goods of 1.3% on month and 1.8% on year, while the capital goods remain substantially stable (-0.2% on year). The heaviest figure comes, again, from the car sector, which records a production collapse of 18.1% compared to a year ago, confirming the main weight of the Italian industrial system, after over two years of difficulty. Pharmaceuticals (-5.2% per year) and chemical production (-4%) worried. The only exceptions, metallurgy and electronics that limit losses, but the industry remains in trouble. “Reassuring” the data of the main Italian outlet market, Germany, where industrial production in May beat the expectations ( +1.2% on a month, +1% on year).
GDP in moderate growth, but international uncertainty weighs
And looking at the trend of the Italian economy in May and June? Istat indicates that geopolitical tensions in the Middle East and the instability of American commercial policies on duties increase global uncertainty, braking world demand, still negative despite a slight recovery. In this scenario Italy is a country with a moderate growth GDP, (0.3%) supported by internal demand, but with an industry that struggles. In this context, Italian companies show signs of trust, growing for the second consecutive month in June, in contrast to consumers who return to show caution. The consumption of families in the first quarter rose by 1.2%, the available income of 1.8% and the purchasing power of 0.9%, but detail sales remain weak, with a drop of 0.5% in volume in May. Inflation remains stable at 1.7% in June, but accelerates the shopping cart (+3.1%), while the energy prices are falling. On the work front, in May the employees grew by 75 thousand units compared to April, but youth unemployment dates back to 21.6%.
