[ROME] Italian industrial production was unchanged in March from the month before, a slightly weaker reading than expected, but output over the whole of the first quarter still posted a firm gain, data showed on Tuesday.

The figures suggest that economic expansion in the euro zone's third-largest economy may have accelerated somewhat in the first quarter following the weak growth seen in the second half of last year.

The flat output reading in March missed the median forecast of a 0.2 per cent rise in a Reuters poll of nine analysts.

It followed a 0.7 per cent drop in February - marginally revised down from a previously reported -0.6 per cent - and a 1.7 per cent monthly jump in January.

Despite the stagnation in March, industrial output, which shows a close correlation with gross domestic product (GDP) in Italy, still rose 0.7 per cent in the first quarter overall, following a 0.1 per cent drop in the fourth quarter of last year.

That augurs well for first quarter GDP data to be issued by ISTAT on Friday.

Italy posted GDP growth of just 0.1 per cent in the last three months of 2015, after a 0.2 per cent increase in the third quarter. ISTAT has forecast a 0.3 per cent gain for the first quarter of this year.

Prime Minister Matteo Renzi's government expects full-year growth in 2016 of 1.2 per cent, accelerating from last year's rate of 0.8 per cent.

Industrial output fell by around a quarter between 2008 and 2014, and has recovered only a small part of that over the last year.

In March, output of consumer goods, investment goods and intermediate products all fell from the month before, but this was offset by a rise in production of energy products.

ISTAT reported that on a work-day adjusted year-on-year basis, output in March was up 0.5 per cent, following a 1.1 per cent rise in February.

REUTERS