Italy’s industrial production unexpectedly increased in April, marking the first annual rise in over two years and signaling a possible turnaround for the nation’s manufacturing sector. According to data released by the national statistics institute ISTAT, output climbed by 1.0% compared to March, defying analysts’ predictions of a slight decline.

On a year-over-year basis, after adjusting for working days, industrial output rose by 0.3%, ending a long streak of 26 consecutive monthly decreases. This monthly improvement was broad-based across most industrial sectors, with energy being the only exception.

Further evidence of gradual stabilization was seen in the three-month period ending in April, with output increasing 0.4% compared to the November-January timeframe.

Paolo Pizzoli, a senior economist at ING, commented that while the data suggest the worst may be behind Italy’s industrial sector, it is premature to declare a full recovery just yet. Similarly, the Bologna-based think tank Prometeia forecasts a modest 0.5% growth in industrial output for the second quarter compared to the previous quarter.

Last week, ISTAT also projected Italy’s overall economic growth at 0.6% for the year, down from an earlier estimate of 0.8%, reflecting uncertainties such as trade tensions from U.S. tariff policies. Despite this, the recent figures provide a stronger foundation for growth in 2025, especially following a revision upward of first-quarter GDP data.

Additionally, a survey indicated that manufacturing output in May edged up slightly for the first time in more than a year, though new orders remain weak, hinting at cautious optimism in the sector.

The Italian government, led by Prime Minister Giorgia Meloni, has adjusted its growth forecast for 2025 accordingly, aligning with analysts’ expectations.