Italy industry output edges up in March but outlook weak

By Antonella Cinelli

ROME (Reuters) -Italian industrial output edged up by 0.1% in March from the month before, data showed on Friday, below market expectations following a 0.9% drop in February, as the euro zone's third largest economy continues to struggle.

A Reuters survey of 12 analysts had pointed to a rebound of 0.5% in March.

On a work day-adjusted year-on-year basis, industrial output was down by 1.8% in March, national statistics bureau ISTAT reported, marking the 26th consecutive decline.

On a quarterly basis, in the January-March period industrial output rose for the first time since the second quarter of 2022, with a 0.4% increase versus the fourth quarter of last year, but analysts played down any hope of a lasting pick-up.

"Restart or momentary momentum?", think tank Prometeia said in a note, forecasting a weak second quarter.

Retail lobby Confcommercio said that even the first quarterly increase in almost three years "can hardly be read as a sign of a trend reversal".

The Italian economy grew by 0.3% in the first quarter from the previous three months, preliminary data showed last week, slightly stronger than expectations.

That came shortly after Prime Minister Giorgia Meloni's government halved its growth forecast for 2025 to 0.6%, following a 0.7% growth rate in 2024.

The outlook is clouded by the prospect of U.S. trade tariffs as well as difficulties faced by Rome in deploying its COVID-19 pandemic recovery funds from the European Union.

The Bank of Italy last month forecast that U.S. tariffs, if confirmed, would have a negative impact of more than half a percentage point on Italian growth in the 2025-2027 period.

(Reporting by Antonella Cinelli, graphic by Stefano Bernabei, editing by Gavin Jones)