Italy: Manufacturing conditions improve at fastest pace in over three years in February
The IHS Markit manufacturing Purchasing Managers’ Index (PMI) rose to 56.9 in February from 55.1 in January, marking the strongest reading in 37 months. Therefore, the index moved further above the crucial 50-threshold, indicating improving conditions in the manufacturing sector.
The improvement in the headline PMI came on the back of the fastest increases in production and new orders in three years, as well as of the strongest rate of job creation since mid-2018. This came against the backdrop of easing restrictions which translated into unleashed pent-up demand both domestically and from abroad. On the price front, input costs rose at the quickest pace in close to ten years amid supply disruptions and shortages of raw materials. Consequently, firms raised their output prices at the fastest pace in three years. Lastly, business sentiment remained positive, thanks to hopes of improved demand conditions and looser pandemic related restrictions.
Commenting on the release, Lewis Cooper, economist at HIS Markit, stated:
“Supply disruptions and rising costs are the principal concern at present. Lead times for inputs lengthened to the greatest extent for ten months, while input price inflation was the steepest since April 2011. Strong demand allowed firms to pass some costs through to clients at a greater rate, however.”