Italy: Manufacturing PMI deteriorates in December
January 3, 2022
The IHS Markit Manufacturing Purchasing Managers' Index (PMI) came in at 62.0 in December, down from November's 62.8. Consequently, the index remained entrenched above the 50-threshold, signaling a continued improvement in business conditions from the previous month.
Despite the slowdown, the reading was broadly positive and closed a fourth quarter that reached the highest average on record. The result was largely driven by slowing, yet still sharp, growth in output and new orders. Meanwhile, order book volumes increased at the fourth highest rate on record, reportedly due to strong client demand, with export orders following the same pattern. Meanwhile, backlogs intensified as new orders surpassed output and pressured capacity. Consequently, in a bid to fill the ranks, the rate of job creation was among the highest on record. Meanwhile, supply disruptions kept pressuring input costs, which in turn were passed on to clients.
Lewis Cooper, economist at IHS market, commented on the outlook:
"In spite of the strong performance, companies moderated their expectations towards output over the next year, with sentiment the weakest since April 2020, as some firms noted concerns surrounding COVID-19, price pressures and supply disruptions. That said, the sector remains in a very strong position as we enter 2022 with little sign of growth momentum fading significantly."
Author: Frederico Teixeira de Abreu, Junior Economist