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Italy industry output rebounds in May after April drop

[ROME] Italian industrial output was slightly stronger than expected in May, rising 0.7 per cent month-on-month after a drop of 0.5 per cent in April, data showed on Tuesday, suggesting modest economic growth remains on track.

The 0.7 per cent rise in May was above market expectations of an increase of 0.5 per cent, according to a Reuters survey of 20 analysts, and marks the third rise in the last four months reported.

However, in the three months to May output was still up only 0.2 per cent compared with the December-to-February period, national statistics bureau Istat said.

Italian industrial output normally shows a correlation with trends in gross domestic product, which rose 0.4 per cent in the first quarter, accelerating from 0.3 per cent in the last quarter of 2016.

Industrial output fell by around a quarter between 2008 and 2014, and has recovered only a small part of that during the last two and a half years.

The government of Prime Minister Paolo Gentiloni forecasts 2017 GDP growth of 1.1 per cent, up from the 0.9 per cent growth seen last year, but leaving Italy in its customary position among the euro zone's most sluggish economies.

The rise in output in May from the month before was founded on increases in production of consumer goods and investment goods, while production of intermediate goods and energy products both declined.

On a work-day adjusted year-on-year basis, output in May was up 2.8 per cent, following a 0.9 per cent rise in April.