Research and advisory firm Prometeia has published its latest analysis of Italian industrial production, warning that despite a marginal uptick in February, the country’s manufacturing sector remains mired in stagnation and increasingly exposed to energy price volatility.
Italian industrial production edged up 0.1% month-on-month in February, falling short of Prometeia’s forecast of 0.7%, after two consecutive monthly declines and a cumulative contraction of 1.1% over the preceding three months.
The modest rise follows a sharp fall in energy output of 5.3% — a reversal of strong January gains — driven by seasonal dynamics that have yet to reflect the ongoing conflict in the Middle East. Excluding the energy component, the broader index would have grown by approximately 0.7%, supported by gains in transportation equipment and machinery, it said.
Prometeia’s assessment is cautious, however. Rather than signalling a genuine recovery, the analysts describe February’s manufacturing growth as a readjustment, leaving the wider picture of industrial stagnation essentially unchanged. Across the major European economies, manufacturing activity was broadly weak during the same period, with Germany and France both stagnant and Spain registering only a partial recovery.
Despite the fragile environment, business confidence has so far held up. Manufacturing confidence indicators not only failed to register the expected deterioration in March — as the geopolitical backdrop worsened — but actually showed a broad improvement in assessments of both production and orders.
Consumer expectations, however, tell a different story. Household fears around price increases are rising sharply, outpacing business concerns, and Prometeia warns this could dampen demand with knock-on effects for consumer goods production and energy-intensive sectors alike.
On the energy front, Prometeia notes that businesses have not yet expressed significant concern, but stresses that this view is heavily contingent on the duration of the current conflict. A prolonged period of geopolitical tension could transform energy cost pressures into a structural competitiveness issue, a particular risk for Italy, which is more reliant on energy imports than many of its European peers and is already operating in a low-growth environment.
Looking ahead, Prometeia’s forecasts for Italian industrial output remain subdued. A slight increase of 0.2% is estimated for March, attributed mainly to a “confidence effect,” before output contracts in April by 0.5% and partially recovers in May with a 0.3% gain. On average, the first quarter is projected to contract by 0.5%, offsetting the positive momentum of 0.4% recorded in the fourth quarter of 2025. Second-quarter growth is also expected to turn negative, at -0.1%.
There is one brighter signal: the industrial production growth diffusion index improved meaningfully for Italy in February, with 59% of manufacturing sectors expanding compared with only 38% in January, measured against the same period a year earlier. Overall, industrial activity was 0.5% higher than in February 2025.
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