Italy industry output posts solid gain in March as Iran war impact awaited

ROME - Italian industrial output rose by 0.7% in March compared to the previous month, data showed on Tuesday, offering some hope to the country's long-struggling manufacturing sector, although output in the first quarter still contracted slightly.

The data shows some initial resilience from Italian industry in the face of surging energy costs triggered by the US/Israel strikes on Iran which began on Feb. 28.

A Reuters survey of 14 analysts had pointed to a 0.2% month-on-month increase in March, following a 0.2% rise in February.

Despite these gains, in the January-to-March period output in the euro zone's third-largest economy was still down 0.2% compared to the previous three months, national statistics agency ISTAT reported.

On a work day-adjusted year-on-year basis, industrial output was up 1.5% in March versus a forecast of a 0.3% increase, following a 0.4% rise in February.

Italian economic think-tank Prometeia said some companies may have chosen to bring forward production and procurement in March, in order to reduce the risk of future disruptions due to the Middle East turmoil.

However, with Italy heavily dependent on imported gas, the impact of the situation in the blocked Strait of Hormuz is likely to weigh on its economy "for much of the second quarter," ING's senior economist Paolo Pizzoli said.

Giorgia Meloni's government last month cut its economic growth outlook to 0.6% for this year and next, reflecting the increase in energy costs and geopolitical tensions, from previous targets of 0.7% and 0.8% respectively.

In 2025 Italy grew by 0.5%.

In the first quarter of 2026 Italian gross domestic product increased by 0.2% quarter-on-quarter, following a 0.3% expansion in the previous three months.

(Reporting by Antonella Cinelli, graphic by Stefano Bernabei, editing by Gavin Jones)

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This story was originally published May 12, 2026 at 6:34 AM.