Sept. 18 (Bloomberg) -- Italian industrial production probably rose in July for the first time in three months as faster economic growth in the U.S. and a decline in the euro's value boosted exports, a survey of economists showed. Production at factories, mines and utilities rose 0.2 percent, after stalling in June, according to the median estimate of eight economists surveyed by Bloomberg News. The report will be released by the Rome-based statistics office at 9 a.m. ``We are seeing modest signs that orders are on the up again,'' said Maurizio Piglione, chief executive officer of Saiag SpA, a Turin-based maker of disposable kitchen ware that supplies retailers such as Carrefour SA and Auchan SA.
The euro's 3.9 percent drop against the dollar in the past three months may help Italian manufacturers such as Fiat SpA and Ducati Motor Holdings SpA sell their goods outside Europe, particularly in the U.S. The world's biggest economy will probably grow an annualized 4.5 percent in the third quarter, a Bloomberg News survey of 59 economists showed. Business confidence in Italy rose to an 11-month high in August, one of the first signs that the economy is starting to recover from a recession in the first half. Rising orders and a drop in inventories led to the biggest monthly gain in the seven- year history of the survey.
`Good Signals'
``A rise in industrial production in July will set the tone for the rest of the quarter,'' said Pasquale Diana, an economist at J.P. Morgan Chase & Co. in London. ``It's a very important month and there are good signals, such as demand picking up and companies paring down their stockpiles.'' Italy is also being helped by signs of recovery among its biggest trading partners. German business confidence rose to a 14- month high in August. The outlook for European manufacturers improved for a second month in August, according to a survey this month compiled by NTC Research for Group Plc.
The euro's gain against the dollar in the first half contributed to a slump in Italian exports in the second quarter that led the economy to contract. The economies of Germany and France also shrank, leading to the second contraction in the euro region's $8 trillion economy since the introduction of the single currency in 1999. Fiat, which said the euro's ascent wiped 500 million euros from sales in the first quarter, this month forecast a ``healthier financial position'' as the euro fell and as Italy's biggest carmaker promotes new models such as the Panda.
Forecasts Cut
The contraction in the economy in the first half will cut growth to 0.3 percent this year, Italy's biggest employers' group, Confindustria, said this month. That forecast was less than half its June estimate and compares with the 0.8 percent predicted by the government in its four-year financial plan released in July. The International Monetary Fund this week cut in half its growth forecast for the euro region to 0.5 percent. The pace of expansion will accelerate to ``about 2 percent'' next year, compared with an earlier forecast of 2.3 percent, the IMF said. To spur a recovery in the region, the European Central Bank reduced borrowing costs three times between December and June, cutting the benchmark rate to 2 percent. ECB council member Ernst Welteke said this week the prospects for economic growth have improved and there is ``no reason'' to discuss further rate cuts. //www.bloomberg.com