"The Italian industry recorded a historically weak March," Oxford Economics said in a note.
The decline hit all sectors, "but the 50 percent drop in transport equipment was just astonishing", it said.
Industrial production was likely to have collapsed again in April, probably by half compared to a year earlier.
Oxford Economics also predicted a downward revision for first-quarter GDP which provisional figures released last month showed declining by 4.7 percent.
Italy's national consumers association said industrial production had been brought down by "an earthquake" bigger than anything seen since 2009, the height of the global financial crisis.
Italy, home to the eurozone's third-largest economy, has been hard-hit with over 30,000 deaths due to the virus. The provisional 4.7 percent contraction in the first quarter compared to a eurozone average of 3.8 percent.
Italy was the first country in Europe to be hit by the pandemic, with the March industrial production figures impacted by a nationwide lockdown imposed from March 10 and all non-essential production being shut down since March 22, paralysing the economy.