Italy: Manufacturing conditions worsen at sharpest pace on record in April
The IHS Markit manufacturing Purchasing Managers’ Index (PMI) crashed to 31.1 in April from 40.3 in March, amid widespread Covid-19 shutdowns. The index thus logged its worst reading on record and 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, new orders and exports fell at the fastest pace in survey’s history against a backdrop of a nosediving domestic economy and evaporating demand from European Union countries experiencing similar lockdowns. As a consequence, manufacturers reduced their staff numbers for the 11th consecutive month and at the quickest pace since April 2009. On the price front, input costs fell due to lower prices for raw materials; meanwhile, firms cut their output prices in a bid to attract clients. On a somewhat more positive note, businesses sentiment in April inched up from March’s record low, on hopes of a timely global economic recovery.
Commenting on the release, Lewis Copper, economist at HIS Markit, stated:
“Overall, PMI data highlight the unprecedented and substantial damage from the coronavirus pandemic on the Italian manufacturing sector. With lockdown measures set to remain in place for the coming weeks at least, and probably not fully removed for several months, the downturn is not likely to ease markedly in the immediate future as firms battle with shutdowns both domestically and abroad.”