From the production side, the industrial sector shrank 0.4 percent, following a 0.8 percent expansion in the first quarter of the year, due to manufacturing (-0.4 percent vs 0.5 percent in Q1) and construction (-0.5 percent vs 2.3 percent). Agricultural output contracted 1.2 percent in the three months to June, after rising 3.0 percent in the prior period. On the other hand, services activities grew 0.1 percent, rebounding from a 0.1 percent contraction in the first three months of 2019, mainly boosted by professional and support activities (1.0 percent vs -1.1 percent); real estate (0.3 percent vs 0.2 percent); service activities (0.4 percent vs -0.3 percent); trade, transport and accommodation (a flat reading vs -0.2 percent); and public administration, defense, education, health (a flat reading vs 0.3 percent). Additionally, financial and insurance activities dropped 0.1 percent, less than a 0.9 percent contraction in Q1 while information and communication services dropped 0.9 percent, after increasing 0.2 percent.
From the expenditure side, fixed investment contributed positively by 0.3 percent to the GDP while inventory changes substracted 0.3 percentage points to the gross domestic product. Meantime, net exports, consumer spending and government spending made a zero contribution to growth.
Fixed investment advanced 1.9 percent, faster than a 0.7 percent expansion in the first three months of the year, mostly boosted by a rebound in machinery and equipment (5.3 percent vs -1.7 percent) and transport equipment (5.8 percent vs -2.2 percent). Meantime, household consumption was flat, following a 0.1 percent growth in th first quarter while government expenditure contracted 0.1 percent, after a 0.2 percent expansion. Exports increased 1 percent in the first quarter of the year (vs 0.3 percent in Q4) while imports rose 1.1 percent (vs -1.6 percent in Q1).
Year-on-year, the economy shrank 0.1 percent, the same as in the first quarter of the year and below a preliminary estimate and market consensus of no growth.
Italy's government expects GDP growth at 0.2 percent in 2019, slowing from 0.9 percent in 2018.