Italy: Manufacturing PMI moderates in September
October 1, 2021
The IHS Markit Manufacturing Purchasing Managers' Index (PMI) fell to 59.7 in September from August's 60.9. September's result marked the worst performance since February. That said, the index remained above the 50-threshold, signaling a softer improvement in business conditions from the previous month.
In detail, despite easing in growth, output and new orders still grew markedly in September. Notably, orders from abroad kept rising at a marked pace. Meanwhile, supply disruptions kept stretching lead times further, with those hitting the fourth highest length on record. As a consequence, inventories fell, with some firms reporting shortages of inputs, prompting backlogs of work to shoot up. More positively, heated activity led to a faster rate of job creation, as firms report recruiting workers to their production lines to meet the increasing workload. Pricewise, firms saw their cost burden increasing amid the sharp producer price increase recorded for the month, which according to the survey, was promptly passed on to clients.
On the outlook, Lewis Cooper, economist at IHS Markit, noted:
"Overall, the sector continues to perform well, with growth remaining rapid despite supply and inflationary issues. It is this issues themselves, however, which may pose ongoing significant challenges in the coming months."
Author: Frederico Teixeira de Abreu, Junior Economist