Italy industry output surges in January after two monthly falls

ROME (Reuters) - Italian industrial output was much stronger than expected in January, jumping 1.9 percent from the previous month after two consecutive declines, data showed on Friday.

The figures are encouraging for economic growth prospects going into 2016 and bucks the trend of recent data, which has been mixed at best, after growth slowed in the course of 2015.

The 1.9 percent increase in January was the largest monthly rise since August 2011, national statistics bureau ISTAT said, and reversed falls of 0.6 percent in December (revised from -0.7 percent) and 0.4 percent in November.

January's data was far above all forecasts in a Reuters survey of 21 analysts which pointed to a monthly rebound of just 0.6 percent.

However, an ISTAT economist cautioned that the data, which is adjusted for seasonal factors and the number of days worked, may still have been distorted by a calendar effect connected with the fact there were unusually few working days in January.

Despite the latest surge, in the three months to January output was up just 0.2 percent compared with the August-to-October period.

Industrial output shows a strong correlation with GDP in the euro zone's third largest economy. Italy saw weak GDP growth of 0.1 percent in the fourth quarter of last year, slowing from 0.2 percent in the third quarter, 0.3 percent growth in the second and 0.4 percent in the first.

Industrial output fell by around a quarter between 2008 and 2014, and recovered only a small part of that during last year's modest recovery, when output was up 1.0 percent from the year before.

Industrial activity was strong across the board in January, ISTAT said, with output of consumer goods, investment goods, intermediate goods and energy products all rising from the month before.

On a work-day adjusted year-on-year basis, output in January was up 3.9 percent - the largest gain since August 2011 - following a 1.0 percent fall in December.

(Gavin Jones, Rome newsroom)