Leap unexpected industrial production in August – The Republic

the MILAN - Jump to surprise in the industrial production in Italy in August: according to the data provided by Istat, the seasonally adjusted and corrected for the effects of the calendar – has grown by 1.7% compared to July 2016 and 4.1% by August 2015. The comparison in trend, i.e. the change-over-year, is the best in five years, i.e. from August 2011. It is also a result well-better than expected: in the note in the morning, economists at Intesa Sanpaolo reported a decline in monthly 0.1% of the production, to rely on then a bounce then to September.

The growth that in the end has emerged from the official data must not let go to easy enthusiasm: this growth, reads the note by Istat, is derived “from changes made in a month typically characterized by a level of production very low,” and leads to an increase of 0.4% in the quarter June-August 2016, compared to the previous. In the first eight months increased 1% compared to 2015.

If you look at the detail of the Istat data, it emerges that the situation is still heterogeneous. In August last year, the sectors that showed the greatest growth trend are those of manufacture of transport equipment (+19.2 per cent), metallurgy and manufacture of fabricated metal products, except machinery and equipment (+13.6 per cent), manufacture of machinery (+11,7%). In particular, it is recorded in the leap of the production of the car, a constant in recent months: in August the index of the four wheels is increased by 41.9% on the 2015 and in the first eight months of the year the production of motor vehicles rose 9.5%. The dec is particularly so in the sectors of mining (-17,7%), production of basic pharmaceutical products and pharmaceutical preparations (5.3%) and of textiles, clothing, leather and accessories (-5,0%).

The economist, Unicredit Loredana Federico, by connecting the leap of the unexpected, in particular, to the recovery of the manufacturing activity and capital goods, explains in a note that “if this trend were to be confirmed in the next months, considering that August is characterized by high volatility, which requires caution in judgement – could have predicted a good recovery of the investments”. However, the reflection of weak domestic demand and the decrease of the new orders (reported from other surveys Istat), which today is manifested by the decrease in the production of consumer goods, both durable and non. On the whole, however, these data surprise on industrial production reinforce the chances to see a growth of the Italian Gdp in the third quarter of the year, according to the analysis of Unicredit should be able to register a +0.1% quarter-on-quarter.

Concurs in the judgment and prudence Paolo Mameli, an economist of Intesa Sanpaolo, according to which “the leap in August should not be over-emphasized: among other things, is common to other european Countries, including Germany (+3,3% m/m) and France (up 2.1% m/m) and, as elsewhere, has focused on the capital goods, the macro-sector is the most volatile.” For September is now waiting for a correction, “since the data of August is in some way ‘abnormal’. In any case, the industry should be back to contribute to the value added in the summer after having braked the economic activity in the spring”.

In summary, the data adds evidence to the idea that the GDP would return to growth already in the summer quarter after the stagnation in the spring. In fact, on the basis of the data of the industrial production the growth of the Gross domestic Product may be greater than 0,2% t/t before the valutavamo as possible in an optimistic scenario. However, it is necessary to wait for the numbers on industrial production for September, and, in general, data for autumn (less spoiled by the volatility in the summer), to get a more precise idea of the evolution of the economic activity. The surveys of confidence on the companies were better than expected in September, but do not indicate a certain "boom" in particular in the industry.

In any case, after this since they seem to reduce the downside risks to the growth target of GDP to 0.8% in 2016.

The national consumers Union speaks of “good data”, but adds that “consumer goods are still declining on an annual basis of 1.3% in the data adjusted for calendar effects. If then we compare the data of today with those pre-crisis, then the road ahead is still very long. Compared with August 2007, industrial production recorded a fall of 11.7%”. In particular, between August 2007 and August last year, durable goods “recorded a fall record of 40.3%. A fact that says a lot about the fact that during the crisis, families were forced to abandon the purchases of the goods more expensive. Now, with regard to August 2015, register to this entry, a rise of 0.6%. A good news, but for sure the ascent is long and tiring”.

The detection of the Centre for studies of Confindustria, however, dampens the enthusiasm: in September, the production would have dropped by 1.8% compared to August: in the third quarter of the year, the research department of Confindustria estimates an increase in activity of 0.8% in the second, when there was a decrease of 0.2% on the first. This trend, the experts in avenue of Astronomy, is consistent with a moderate increase in Gdp in the summer months, after the stagnation recorded in the spring. The fourth quarter of 2016 inherits a short-term change of industrial production equal to -0,6%.