Italy: Manufacturing conditions improve at fastest pace in over two years in August
The IHS Markit manufacturing Purchasing Managers’ Index (PMI) rose from 51.9 in July to 53.1 in August. The result marked the strongest reading since June 2018. Therefore, the index moved further above the crucial 50-threshold, indicating improving conditions in the manufacturing sector.
The expansion in the headline PMI came largely on the back of the strongest increases in production and new orders since February 2018. That said, exports fell again, albeit mildly, as lockdowns abroad continued to restrain demand. Moreover, manufacturers reduced their staff numbers for the 15th consecutive month although the pace of job shedding was only fractional. On the price front, input costs rose again on higher raw material prices although firms kept cutting their output prices in a bid to attract clients. Lastly, business sentiment grew to its highest level in the series history, on rising hopes of economic recovery.
Commenting on the release, Lewis Copper, economist at HIS Markit, stated:
“Overall, August data provided some very encouraging signs for Italian goods producers, with indications that a recovery from the worst effects of the pandemic is now well underway. However, export orders remain a key drag, and with employment still falling, domestic demand on its own is unlikely to provide enough momentum to really drive the recovery.”