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Investing.com - Italy’s seasonally adjusted industrial production contracted by 2.4% month-over-month in August, reversing July’s 0.4% expansion, according to data released by Istat. This decline comes as European markets show mixed signals, with the DAX trading near its 52-week high of $46.09, suggesting broader market resilience despite regional industrial challenges. InvestingPro data reveals the index has delivered a robust 37.7% year-to-date return.
The working day adjusted production figures showed a 2.7% year-over-year decline, compared to a 0.9% increase in July. All major aggregates contracted during the month, with investment goods showing particular weakness, while manufacturing production specifically fell 1.9% month-over-month. Despite these headwinds, InvestingPro analysis shows the DAX maintaining an impressive 22.1% six-month return, with consistent dividend payments maintained for 11 consecutive years, offering potential defensive opportunities in uncertain times.
Sector performance was mixed, with pharmaceuticals and transport equipment posting strong monthly gains, contrasting with sharp contractions in mining and plastics. The average manufacturing production over the first eight months of 2025 is down 1.4% compared to the same period in 2024.
ING noted that the figures were "way weaker than expected" and suggested that hopes for even a modest improvement in the third quarter have not materialized. The bank cautioned that August data should be interpreted carefully due to variable plant closings during the peak holiday period.
The weak industrial output raises concerns about Italy’s economic outlook, with ING maintaining its current forecast for a "meagre 0.1%" GDP growth in the fourth quarter of 2025, while acknowledging that the latest data adds "downside risk" to this projection.
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