Italy industrial output unexpectedly falls 1.3% in August

Italian industrial output unexpectedly fell 1.3% in August from the previous month, according to data from national statistics bureau ISTAT. This marks a significant downturn after a 0.6% rise in July and is a weaker reading than the flat month-on-month forecast by analysts surveyed by Reuters. The decline clouds the outlook for the euro zone's third-largest economy.

The rolling three-month average for industrial output, covering June to August, showed a 1.1% decrease compared to the preceding three-month period of March to May. July's data was also marginally revised down from its initial report of a 0.7% increase to 0.6%.

On a year-on-year basis, adjusted for working days, industrial output was flat in August, following a 0.1% decrease in July. Despite these recent figures, the Italian economy had shown resilience in the first half of the year, with gross domestic product growing by 0.3% in the first quarter and 0.2% in the second. The government of Giorgia Meloni recently raised its GDP growth forecast for 2026 to 1%, up from a previous estimate of 0.6%. However, the economy has not exceeded 1% growth in the last three years, even with substantial EU recovery funds.