The resumption of industrial production in Italy: the Macro Flash

Starting in the first quarter of 2018, the first signs of a slowdown in the Italian economy appeared, which then turned into a “technical recession” during the second half of the year.

The worsening coincided with the deterioration of the economic cycle in the euro area, already forewarned by the confidence indicators, coinciding with the emergence of the first trade tensions between the United States and China in January 2018.

In the second half of the year came the addition of a certain turbulence on the financial markets, linked to factors of domestic political uncertainty rather than to the dynamics of the real economy, which then stabilised subsequently.

Since the beginning of 2019, in line with the improvement in the climate of global confidence and the “rebound” in world trade, Italian industrial production has recovered, surprising market expectations.

At present, it is difficult to predict whether this recovery will be driven by an adjustment in supply in response to the exceptional use of inventories at the end of 2018, or by a real reversal of the cycle, which could bring about an exit from the recession.
It can be noted, however, that although cyclical indicators remain unfavourable, some positive factors emerge, which are likely to be reflected in the preliminary GDP estimate for the first quarter of 2019.

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