Italy: Manufacturing PMI drops to four-month low in July
August 2, 2021
The IHS Markit Manufacturing Purchasing Managers' Index (PMI) fell to 60.3 in July from June's all-time high of 62.2, marking the lowest reading in four months. Although, the index remained entrenched well above the 50-threshold, it signaled a softer improvement in business conditions from the previous month.
July’s reading largely came on softer growth in new orders and output. The expansions were still robust, however, amid still-upbeat demand conditions due to the reopening of some sectors. Regarding employment, firms raised staff levels for the eleventh month straight as backlogs of work rose sharply. The rate of job creation slowed from the previous month, however. On the price front, meanwhile, input cost inflation continued its upward trend, chiefly owing to supply shortages, and output charges rose at the fastest pace on record as firms passed on costs to customers. Lastly, although sentiment in the sector fell to a 15-month low due to concerns over rising infection rates and the potential reimposition of restrictions, firms were still optimistic regarding the outlook for the coming year.
Author: Hanna Andersson, Economist