This paper analyses the contribution of lubricant oil consumption to the very short-term forecasting (nowcasting) of the industrial production index in Italy. The consumption of these products, which are crucial in mechanical processing, has a high correlation with industrial activity. Unlike other indicators, such as gas and electricity consumption, lubricant oil consumption has maintained a close correlation with manufacturing activity even during periods of large energy cost shocks.
The results show that the inclusion of lubricant oil consumption in some econometric models improves the accuracy of forecasts of the change in the industrial production index over the period 2021-23, while there is no significant impact for the three-year period 2017-19.
