Italy: Manufacturing conditions worsen at sharpest pace in almost 11 years in March
The IHS Markit manufacturing Purchasing Managers’ Index (PMI) plunged to 40.3 in March from 48.7 in the second month of 2020, amid efforts to fight against the coronavirus pandemic. The index thus dived further below the crucial 50-threshold, indicating worsening conditions in the manufacturing sector, where it has been for over one year.
The sharp deterioration in the headline PMI came on the back of tumbling output and new orders as well as of severe job shedding. Output fell at the fastest pace on record against a backdrop of plunging domestic and external demand. As a consequence, manufacturers reduced their staff numbers at the quickest pace in over eight years. On the price front, input costs fell significantly due to lower prices for raw materials, which led firms to cut their output prices as a result. Lastly, businesses sentiment in March was the lowest on record, although firms expected output to rise somewhat from current abysmal levels going forward.
Commenting on the release, Lewis Copper, economist at HIS Markit, stated:
“Overall, March data highlighted one of the worst performances of the sector on record. With the Italian economy effectively shut down, it is unlikely that any recovery from the significant COVID-19 disruptions will be swift.”