Unlike the strength in UK IP in June or the sharp rise in orders in Germany, Italy’s MFG sector is showing a broad-based slowing.

Italy’s three-month growth rates by sector tell the story of a slowdown across the board. Overall IP remains in a declining mode for both 3-month and 6-month growth rates and these are both much weaker even than its Y/Y decline. The consumer sector in Italy shows an accelerated decline in the output of both consumer durables and nondurable goods.. One minor exception is the three-month bounce back in intermediate goods, up by 2.1% over three months but still showing a six-month rate of decline of 3.4%. Transportation is the counter-trend sector with output up by a strong 9.5% over three months and up by 0.7% over six months; its Yr/yr pace stands at 4.2%.

Italy has been showing more irregularity than other Euro area countries for some time. While German industrial measures like its IFO survey show that Germany is well off peak, other measures like German orders (issued today) still show a lot strength - even acceleration. But Italy, one of the weaker EMU countries in terms of its competitiveness is showing its wear and tear more regularly. I wonder if this is the way the strong euro will undermine the Euro area, by gnawing away at its weakest members first…