Italy: Manufacturing PMI picks up in August
September 1, 2021
The IHS Markit Manufacturing Purchasing Managers' Index (PMI) rose to 60.9 in August from July's 60.3. As a result, the index moved further above the 50-threshold, signaling a faster improvement in business conditions compared to the previous month.
The improvement in August’s reading was mostly driven by swifter expansions in output and new orders, which grew at one of the fastest paces on record. Meanwhile, firm export orders elevated the order book. Consequently, more jobs were created to fill the ranks and face the rising workload. Notably, despite being the slowest expansion since April, backlogs kept accumulating revealing heightened capacity pressures. Turning to inventories, manufacturers piled up stocks of pre-production goods for the first time since January to hedge against ongoing shortages. These shortages, together with higher transportation fees, kept exacerbating input prices, which rose, albeit at a softer rate, but still leading to a pronounced hike in output prices.
On the outlook, Lewis Cooper, economist at IHS Markit, noted:
"The sector remains on a strong footing in August, with momentum accelerating despite these constraints. Firms’ confidence towards output over the next year improved on the month, with sentiment the strongest since December 2020, suggesting that goods producers themselves expect growth to continue."
Author: Frederico Teixeira de Abreu, Junior Economist