Industrial production -1.2% in January, -3.4% annually. Only food is saved

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The illusion of December is already vanishing, with the Istat survey in January completely canceling the progress (unexpected, to be honest) recorded at the end of 2023 for industrial production. In fact, industrial output now falls by 1.2% on a monthly basis, and by 3.4% on an annual basis. Negative balance, however, slightly improved on average by the recovery of energy, with widespread declines instead for all macro-sectors, from consumer goods to durables, with manufacturing losing 3.7% on an annual basis.

A collective slowdown that Istat records in 13 out of 16 sectors: the only manufacturing sector in the strict sense to be “saved” is the food sector, which however is progressing by only 0.6%. Elsewhere, however, only negative signs are evident, with the most pronounced declines for electronics, wood-paper and pharmaceuticals. The area of ​​machinery and capital goods is also down, a sector which awaits the implementation of the 5.0 measures with the latest implementing decrees (to be issued by the beginning of April) and which from the point of view of internal demand is at least partially put into stand-by position waiting for bonuses.

A less than brilliant climate also confirmed by Istat qualitative indications, with business confidence indices declining in every sector. For manufacturing companies, in particular, both the current assessments of orders and production and the expectations for these variables in the coming months are reduced. The latest indications on consumption are also weak, judging by the retail sales data, supported in value only by price dynamics, while yet another decline is evident in volumes: on an annual basis we have thus reached the twentieth consecutive month of reduction.

Driving force for the industry which at the moment does not even come from exports, capable in the latest January survey only of containing the damage (-0.2%) also due to the continued weakness of purchases from France and Germany.

In fact, the situation does not appear to be brilliant even across the border, with French manufacturing losing 1.6% monthly in terms of production and Berlin experiencing continuous difficulties. Even if in January a recovery of one point on a monthly basis is visible in Germany, in annual terms the slowdown in production is 5.5%, with an index that remains well below pre-Covid values. However, what is especially worrying are the prospects, visible in a monthly drop in orders of 11.3% (-6% on an annual basis), with an overall volume that has never been so reduced as since the times of Covid (June 2020). The construction sector in particular is clearly slowing down, dragging down a large related industry, as happens in Italy: new building permits in January are down by 24%, almost halved compared to the pre-crisis period, following 25 consecutive months of reductions, often in double figures. In the whole of 2023, 91 thousand houses were built, up from 136 thousand the previous year. The auto sector is holding up (but not shining): there is in fact a growth of 12% in the first two months in terms of registrations and yet, looking at the demand for our components manufacturers, internal production drops by 5% between January and February, reversing course following a growth in 2023.