Italian Industrial Output Rises More Than Forecast
Italian industrial production rose more than economists forecast in July, signaling the economy may be recovering from its worth recession in 60 years.
Production climbed 1 percent from June, when it fell a revised 0.6 percent, statistics office Istat in Rome said today. The gain was more than twice the 0.4 percent median forecast in a Bloomberg News survey of 17 economists. From a year earlier, adjusted production fell 18.2 percent.
Italy’s economy has contracted for five straight quarters, with gross domestic product shrinking 0.5 percent in the three months through June, statistics institute Istat said yesterday. The rate of GDP contraction is slowing, and consumer and business confidence have rebounded as European trading partners France and Germany emerged from recession.
“Industrial orders rose in May after nine consecutive falls and business confidence has been improving since April,” said Laura Cavallaro, an economist at Aletti Gestielle in Milan. Still, “we should be very careful to infer from this data that third-quarter GDP will be positive.”
Government incentives to buy cars and home appliances helped boost consumer spending, which increased in the three months through June after two straight quarterly drops, yesterday’s report showed free credit reports. New car registrations rose 8.5 percent in August and models by Fiat SpA Italy’s biggest manufacturer, climbed 10 percent.
Production of consumer goods rose 0.9 percent in July, compared with a decline of 1 percent the previous month, today’s report said. Production of all transport vehicles gained 3 percent from the previous month.
The improved optimism has led to better growth forecasts and expectations that the economy will return to growth in 2010. Confindustria, Italy’s employers’ lobby, this week raised its prediction for an expansion next year to 0.8 percent, more than the 0.7 percent made in June.
European Central Bank policy makers signaled yesterday that they intend to leave emergency lending measures in place into next year to support an economic recovery. The Frankfurt-based ECB is flooding banks with cheap cash in the hope they will lend it on to companies and households and get them spending again.
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