ROME (Bloomberg) -- Italian industrial production fell in March for a second month, a sign that rising energy costs and a stronger euro are hurting the country’s economy.

Production dropped 0.2 percent from February, when it slipped by the same amount, the national statistics office said in Rome Monday. Economists predicted manufacturing would be unchanged, the median of 23 forecasts in a survey by Bloomberg News showed.
“Industrial production has been a clear indicator of Italy’s economic slowdown,” said Vladimir Pillonca, an economist at Morgan Stanley in London. “There may or may not be a technical recession, but the bottom line is that the economy will grow little this year.”
Italy’s economy will expand 0.3 percent this year, a fifth of last year’s pace, the International Monetary Fund predicts. Prime Minister Silvio Berlusconi, who took office last week, has pledged to eliminate a property tax and levies on overtime pay at his first Cabinet meeting to boost consumer spending.
The euro’s 13 percent climb against the dollar in the past year, which took the currency to a record $1.6019 on April 22, is making Italian exports more expensive abroad. Inflation, pushed by food and energy prices, accelerated to an 11-year high in March and only slowed slightly in April.
Production of Italian consumer goods fell 0.7 percent from February and the output of durable goods like refrigerators declined 2.8 percent. Non-durable goods dropped 0.7 percent. The only gain came in energy related goods, which rose 2.3 percent.
Part of the decline in output may have been caused by the plunge in car production, which fell 9.2 percent from a year earlier on a non-adjusted basis. Istat did not give car output figures compared with the previous month.