Istat: industrial production in July + 7.4% on the month, but -8% on the year

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10 September 2020 Industrial production in July increased by 7.4% compared to June while it decreased by 8% compared to July 2019. Istat notes this, underlining that in the average of the May-July quarter, the level of production increased by 15% compared to the previous three months.   

The monthly seasonally adjusted index shows economic increases widespread in all sectors: capital goods (+ 11.8%), intermediate goods (+ 7.7%), consumer goods (+ 6.2%) and marginally grow energy (+ 0.1%). On a trend basis, the decline is more pronounced for intermediate goods (-11.3%), while it is less relevant for the other aggregates, with decreases of 6.8% for capital goods and energy and 6.2% for consumer goods.

In July, overall industrial production decreased by 8% compared to July 2019, but if that of the food sector holds with a limited decline of 0.4%, that of the textile and clothing industry collapses (-20.6% on July 2019). According to Istat data published today, the manufacture of coke and refined petroleum products (-21.4%) and the manufacturing of means of transport (-11.5%) and metallurgy (-10, 5%) while pharmaceutical production (-1.4%) and that of computers and electronics (-4.4%) hold. Compared to June 2020, the production of textiles and clothing increases by just 0.8% compared to the overall + 7.4% while the food sector marks a + 1.6% and the manufacturing of means of transport + 12.7%.

Between January and July industrial production decreased by 16.8% compared to the first seven months of 2019 according to the data corrected for the effects of the calendar, Istat notes, underlining that if for food the decline was limited to 2.7%, for the textile and clothing industry the drop in production was 32.4%. The production of means of transport recorded a decrease of 29.9% and the metallurgy and manufacture of metal products by -20.7%, a lesser trend contained in the first seven months of 2020 was also the production of pharmaceutical products (-3.7%.). In July, the recovery of production compared to June (+ 7.4%) is the result of growth in almost all sectors with a leap in computer production (+ 16.5%) from the manufacture of means of transport (+12, 7%).

In the second quarter of 2020, despite the recovery in May and June, Istat estimates a sharp decline in exports for all territorial divisions due to the sharp drop in April: -28.2% for the South and Islands , -26.6% for the North-West, -23.2% for the North-East and -23.1% for the Center, compared to the previous month. This is the result of the 'Exports of the Italian regions' report. In the period January-June 2020, Istat continues, the decrease on an annual basis in exports is marked and widespread at a territorial level: compared to the national average, it is wider for the Islands (-20.4%) and the North-West ( -16.1%), of the same size for the Center (-15.3%), more contained for the North-East (-14.3%) and the South (-13.4%). In the first six months of the year, Istat continues, the decline in exports on an annual basis affects almost all the Italian regions and is wider for Basilicata (-36.8%), Sardinia (-35.3%) and Valle d Aosta (-31.0%). The negative performances of Piedmont (-21.2%), Lombardy (-15.3%), Veneto (-14.6%) and Emilia-Romagna (-14.2%) explain two thirds of the decline on an annual basis of national exports. Only Molise (+ 30.2%) and Liguria (+ 3.7%) recorded, in comparison with the first half of 2019, a positive trend in exports. In the same period, the decline in sales of machinery and equipment to Lombardy, Emilia-Romagna, Veneto and Piedmont and of base metals and metal products from Lombardy contribute to the trend decrease in national exports by 3.5 percentage points. On the other hand, the increase in sales of base metals and metal products from Tuscany and of pharmaceutical, chemical-medicinal and botanical items from Lombardy, Veneto, Tuscany, Marche and Emilia-Romagna contrasts by 1.5 points the decline in In the first six months of 2020, the greatest contributions to the annual decrease in national exports derive from the decline in sales of Piedmont (-18.8%) and Lombardy (-16.5%) to Germany, Lazio ( -39.9%) and Piedmont (-22.7%) to the United States and Piedmont (-22.1%), Lombardy (-17.8%), Veneto (-17.2%) and Emilia- Romagna (-15.9%) to France. The provincial export analysis shows negative performances for most of the Italian provinces: the worst ones concern Milan, Turin, Florence, Brescia, Vicenza and Bergamo. Among the positive performances, the best are recorded for Arezzo, Rovigo and Genoa.

The Istat data on industrial production "confirms that the recovery in production is significant with a monthly increase of 7.4% which is more than double the consensus forecasts. below the levels of July 2019 but supports the thesis of a strong rebound in GDP "and" a probable double-digit increase in GDP in the third quarter ". This was stated by the Minister of the Economy, Roberto Gualtieri, speaking at the presentation of Sace's 2020 export report. "We must proceed with caution" he added "we have challenging months ahead of us but we can be confident of a gradual return to normality".