Italy: Manufacturing recovery loses momentum amid renewed restrictions in November
The IHS Markit manufacturing Purchasing Managers’ Index (PMI) dropped to 51.5 in November from 53.8 in October, which had marked the strongest reading since March 2018. However, the index remained above the crucial 50-threshold, indicating improving conditions in the manufacturing sector.
The decline in the headline PMI came on the back of a slower increase in production and the first drop in new orders in five months amid renewed Covid-19 related containment measures. Moreover, exports orders fell for the first time since August amid border closures. However, companies continued to hire more staff, with the pace of job creation faster than in October. On the price front, input costs rose at the quickest pace in over two years amid higher raw material prices and supply chain disruptions. Consequently, firms raised their output prices, although the pace of increase was only marginal. Lastly, business sentiment moderated but remained positive, thanks to hopes of a global economic recovery.
Commenting on the release, Lewis Copper, economist at HIS Markit, stated:
“Overall, data remained promising, especially in the context of stricter COVID-19 related measures. With recent vaccine developments, there is hope that the economy can soon reopen fully, and in that eventuality the sector will be well placed to continue to make up lost ground.”