Recovery In Y/Y IP Continues In Line With Surveys

Italian December industrial production was stronger than expected, with November's figures also revised higher. However, the annual print has now been negative for 11 consecutive months, with December's print -2.1% Y/Y WDA (vs an upwardly revised -2.9% prior). The consensus of -2.5% was formed of just three analysts.

• The improvement in today's print tracks the latest survey data, with the Italian manufacturing PMI having risen for 3 consecutive months through January, and the EC industrial confidence survey seeing a modest uptick in the latest release. However, both remain in contractionary territory, consistent with the development of Y/Y IP.
• This trend is somewhat contrary to Spain, where December IP ticked lower in December in spite of survey recoveries.
• Capital goods (0.7% Y/Y vs 0.8% prior) were the only major sub-component to see a positive annual rate in December, though consumer and intermediate goods did see improvements vs November. Durable consumer goods printed at 0.6% Y/Y after 10 consecutive negative months prior.
• The SWDA monthly print of +1.1% M/M had a 13-analyst consensus of 0.9% (vs an upwardly revised -1.3% prior). The 3m/3m growth rate of SWDA IP also improved, but remains negative at -0.5% 3m/3m (vs -0.7% prior). This provides some colour to the Q4 flash GDP release, where domestic demand was a negative contributor to the 0.2% Q/Q estimate.