In February, the rate of growth of Italy’s manufacturing sector showed the fastest increase in output and new orders since December 2015. Employment growth was the highest since late 2000.
Source: Markit
Why this matters: Italy has been a growth laggard in the eurozone. It has lost 25% of its industrial capital since the financial crisis of 2008. And the economy has been basically stagnant since the euro was formed, with real GDP at the same level today as in the year 2000. And so, Italians now question the euro more than any western European country. If Italy can grow, we could see a big political impact that changes the outcome of coming elections, where the populist Five Star Movement has moved center stage. And Italy matters to Europe almost as much as Germany and France.