Sector performance remains uneven, with signs of improvement concentrated in capital goods. The data is consistent with the contraction in industrial value added signalled by Istat’s preliminary 3Q26 GDP release.

Italian industrial production surprised to the upside in September, rising by 1.2% month-on-month after contracting by 1.3% in August. The improvement was driven by capital goods (+1.3%) and intermediate goods (+1.2%), while consumer goods (-0.2%) and energy (-1.4%) declined.
The September rebound is certainly welcome, but it does not yet mark a convincing turnaround for Italian industry. Looking through monthly volatility, production declined by 0.4% quarter-on-quarter in the third quarter. On a calendar-adjusted basis, output was also 0.1% below its September 2025 level.
There are nevertheless some encouraging signs beneath the headline. Capital goods production was 2.1% higher than a year earlier, while transport equipment recorded a strong 7.3% increase. At the other end of the spectrum, chemicals contracted by 8.3%, textiles, clothing and leather by 4.5%, and consumer goods overall by 3.0%. Intermediate goods production remained 1.4% below last year's level.
The combination suggests that Italian manufacturing is still struggling to establish a broad-based recovery. The September bounce eliminates part of August's decline, and the strength in capital goods is an encouraging signal for investment-related activity. Continued weakness in consumer goods highlights the vulnerability of the consumption pipeline to the ongoing inflation wave. The 0.4% contraction recorded by the aggregate index over the third quarter looks consistent with the unquantified fall in industry value added signalled by the preliminary GDP estimates.
For the coming months, the picture looks set to remain uneven. Based on business confidence data, chances of an order-driven gradual recovery seem concentrated in the capital goods domain. Slightly increasing inventories signal no urgency in accelerating production for re-stocking. With energy costs still extremely elevated, barring positive surprises from external demand, a flattish profile for aggregate production over the fourth quarter looks likely.

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