Italian industrial production growth weak as fears rise for Eurozone

Melissa Parvis Sharecast | 10 Oct, 2014 10:32 - Updated: 11:47 | | |

comisioneuropea_630 European Commission

Figures released for Italy’s August industrial production index have added to rising fears that the country may have slipped back into recession in the third quarter of 2014.

In August, although Italy’s month-on-month output increased 0.3% in seasonally adjusted terms, the index underperformed slightly with analysts expecting an increase of 0.5%.

Meanwhile, compared with August 2013, the index declined by 0.7% on a calendar-adjusted basis.

On a non-seasonally adjusted basis, industrial production showed a significant plunge of 3.7% compared with last year.

Over the three months to August 2014, industrial production fell 0.3% compared with the preceding three months.

However, 2014’s poor result could be partially attributed to Italy’s recent labour reforms.

The proposed labour reforms will enable firms to fire employees on open-ended contracts with increased ease. The proposition has been extremely unpopular, but may have weighed down the industrial production index due to disincentivised employees.

In recent months, Italy’s growth has weakened whilst France’s economy has shown signs of stagnation. There are even signs that Europe’s biggest economy, Germany, may too be entering into recession.

More news

17:15 London close: FTSE's progress dampened by ex-dividends, sterling's rise and Brexit worries

Stocks in London passed through a relatively quiet Thursday, with numerous ex-dividend equities, a stronger sterling and Brexit worries combining to dampen progress heading into the end of the first quarter.

17:11 Sector movers: Industrial engineers, miners jump at quarter-end

Cyclicals were clearly in favour heading into the end of the first quarter, on the back of positive analyst chatter out of some of the top brokers in the world and as prices for most key industrial metals reversed their losses seen in overnight trading.

16:58 FTSE 250 movers: Petra provides the shine; RPC melts

Petra Diamonds shone brightly on the FTSE 250 on Thursday with shares in the company up 9% as it announced a $600m notes issue and refinancing package.

16:39 Friday preview: UK GDP story should remain unchanged

UK national growth figures for the fourth quarter of last year will be the main economic data event on Friday, along with details on the current account and the index of services and house price data from Nationwide.

15:52 Small cap news round-up

Insurance premium finance-focussed finance group Orchard Funding Group announced its unaudited results for the six months to 31 January on Thursday, with the board reporting it lent £31.1m for the period.

15:47 Bank of England could use palm oil in new £20 note

The Bank of England is pondering using palm oil in the production of the new £20 note following criticism from vegans and religious groups after the revamped £5 note was found to contain traces of animal fat.

14:45 Results round-up: International Public Partnerships, Polypipe Group

International Public Partnerships posted its full-year results for the 12 months to 31 December on Thursday, reporting net asset value growth of 24.3% to £1.6bn.

15:44 Broker tips: Morrison, Kingfisher, Ashtead, Admiral

Bank of America Merrill Lynch upgraded Morrison to ‘buy’ from ‘underperform’ and lifted the price target to 275p from 220p.

14:34 Thomas Cook's summer bookings increase with strong demand for Europe

Thomas Cook’s winter programme is closing out as expected although it is seeing some margin pressure in parts of the business due to increased competition.

13:34 Initial US weekly unemployment claims drop 3,000 to 258,000

A key measure of the US jobs market improved slightly during the latest reference week, but still overshot economists' forecasts.