--Italy's April industrial output dn adjusted annual 1.8%
--Italy's April monthly industrial output below expectations
--Italy's Apr yearly industrial output fall biggest since May 1999
Rome, June 14 (BridgeNews) - Italian industrial production fell a seasonally and working-day adjusted 1.9% in April from March and slid a working-day adjusted annual 1.8%, the largest yearly decline since May 1999, national statistics institute ISTAT said Thursday. The monthly figures are worse than a BridgeNews survey forecast for a 1.6% decline.
* * * Without adjustments for the one extra working day in April 2001 than in the same month of 2000, output rose an annual 2.6%. The latest data represent a considerable deterioration from March when output advanced an adjusted 0.5% over February and increased a better-than-expected working-day adjusted 3.3% on the year increase, an upward yearly revision from 3.2% from an earlier release. On an unadjusted basis March output fell 0.2% on the year, an upward revision from an originally reported decline of 0.3%. The sharp decline in Italy's April figures was led by poor performances in consumer, investment and intermediate goods, which slid an adjusted 1.2%, 3.7% and 1.6% respectively.
Weakness in the mining sector, down an unadjusted 10.3% on the year, the rubber industry, which fell an annual 2.8% and transport, which slid 9.2%, were the worse hit sectors in April. The bad figures bring down the cumulative annual average expansion in output since the beginning of the year to 1.6% on a working-day adjusted basis over the same period last year. It stood at close to 3% in the first quarter. Unadjusted output for the first four months of the year rose 2.4%. The data confirms the negative findings of a number of industry surveys. Italian think-tank Ref.Irs saw production falling a seasonally and working-day adjusted 1.7% on the month, while national employers' association Confindustria estimated it sliding a similar 1.6%.
"The year started with a slowdown in domestic demand, now there's a slowdown in global trade. Firms are forced to cut production to prevent a build up in inventories in consumer, investment and intermediate goods," said Vincenzo Guzzo at Morgan Stanley Dean Witter in London before the release of the April data. Analysts had also expected the placing of festive days output to further weaken output, since it encouraged employees to take extra holidays. The month of May could prove to have been more promising than April. Employers association Confindustria estimated in its latest "rapid" survey industrial output to have risen 1.4% over April, a finding that appears to have been confirmed by Italian think-tank, ISAE, whose confidence survey pointed to a rise in producer optimism led by short-term production prospects.
However, the orders picture casts a shadow. Official data showed March orders deteriorating for the second month running, sliding at the fastest rate in more than two years, while ISAE's latest confidence survey saw orders falling, with demand from abroad at the lowest levels since August 1999. The manufacturing purchasing managers index, meanwhile, remained below the crucial contraction mark of 50 for the second consecutive month. Analysts believe a sustained rebound in Italy's manufacturing sector is only possible in the second half of year, helped in part by the new center-right government's promised fiscal relief on consumers and business investment and a possible upturn in the U.S. economy.
The decline in Italian industrial production adds to bad news elsewhere in the 12-nation euro zone led by Germany, where April data released last week showed a decline in output for the second consecutive month. Most economists expect second quarter industrial output in Europe's single currency area either to fall or at best be flat, after a 0.1% drop in the first three months of the year.