Italy: Deterioration in operating conditions eases in April on stronger export sales
The IHS Markit manufacturing Purchasing Managers’ Index (PMI) rose to 49.1 in April from March’s 47.4, which had marked the worst reading in close to six years. The index nevertheless remained below the crucial 50-point threshold that separates expansion from contraction in the manufacturing sector, where it has been for seven months in a row.
The improved print benefited from a softer contraction in new orders and, especially, from the fastest increase in export sales in 10 months. That said, new orders contracted for the ninth consecutive month. Production also continued to fall, and did so at a sharper pace than in March. On the other hand, manufacturers hired more staff, with the pace of job creation rising to the highest since October, which helped manufacturers reduce backlogs of work. Input costs, meanwhile, rose at a stronger pace than in March, fueled by higher prices for raw materials. This led firms to increase output prices, although only softly. Lastly, business confidence dipped, but remained in positive territory overall.
Commenting on the outlook, Amritpal Virdee, Economist at IHS Markit, remarked:
“April’s PMI data signalled a more positive picture for manufacturers […]. If the current trends for new business continue, the stage is set for a return to growth in output over the coming months.”