UPDATE 1-Italy July output edges up after jump in France

Published 09/10/2010, 06:12 AM
Updated 09/10/2010, 06:16 AM

* Italian output rises 0.1 pct vs expectations of 0.5 pct

* Analysts say data supports signs of slowing global demand

* Q2 GDP growth raised to 0.5 percent vs 0.4 percent

(Adds analyst comment, GDP data)

By Gavin Jones and Catherine Hornby

ROME, Sept 10 (Reuters) - Italian industrial output rose by a weaker-than-expected 0.1 percent in July, completing a mixed picture among large euro zone countries after a similar result in Germany but a surprise surge in France.

Italy's data disappointed on expectations for a 0.5 percent increase but, coupled with the data from its two larger neighbours, should ensure a rise in aggregate output in the 16-nation bloc when data is released on Sept 13.

A Reuters survey conducted before the national data was released pointed to a 0.2 percent euro zone increase after a 0.1 percent fall in June.

"The figure is a bit disappointing and that echoes what we saw in German output earlier this week. It suggests that we are seeing a loss of momentum in world demand," said Gilles Moec of Deutsche Bank.

"It's true that French output was good today but France is a little less sensitive to fluctuations in demand outside the EU."

Moec forecast Italian growth would slow to 0.3 percent between July and September, a more upbeat outlook than that of the Paris-based Organisation for Economic Cooperation and Development, which on Thursday forecast a third quarter contraction for Italy.

France reported a 0.9 percent jump in July output earlier on Friday, boosted by a surge in car production, but Germany on Wednesday also reported a weaker-than-expected 0.1 percent rise.

Germany, France and Italy together account for more than three-quarters of the economy of the euro currency area. Gross domestic product for the whole of the zone rose a surprisingly strong 1.0 percent quarter-on-quarter in the April-June period, largely due to a German surge, up from 0.3 percent in the first quarter.

In Italy, ISTAT on Friday reported that overall economic growth was 0.5 percent in the second quarter, revising up its preliminary estimate of a 0.4 percent rise.

Annual growth was raised to 1.3 percent from 1.1 percent, the strongest rise since the third quarter of 2007, before Italy, like most of the euro zone, fell into its worst post-war recession.

Details showed the second quarter GDP rise was driven largely by net exports, which contributed 0.6 percentage points to quarterly growth, while investments were also firm.

Consumer spending however, continued to stagnate for the third quarter running. (Reporting by Gavin Jones; editing by Stephen Nisbet)

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