Italy: Manufacturing sector at over six-and-a-half year high on booming new orders
December 1, 2017
The IHS Markit manufacturing Purchasing Managers’ Index (PMI) came in at a multi-year high of 58.3 in November, above October’s 57.8 reading. The index thus moved further above crucial the 50-point threshold that separates expansion from contraction in the manufacturing sector, where it has been for 15 consecutive months.
November’s result came on the back of multi-year high expansions in output, new orders and exports. New orders grew at the fastest pace in over seven years mainly buttressed by rising levels of export demand. This led production to expand strongly and prompted businesses to expand their workforces markedly. However, backlogs of work increased strongly for the seventh consecutive month, signaling growing pressure on manufacturing capacity. Moreover, expectations of output over the coming months rose to a five-month high thanks to a supportive demand environment. In terms of price developments, due to widespread shortages of raw materials, the rate of input price inflation accelerated further, which was reflected in output prices rising markedly.
Paul Smith, Director at IHS Markit, commented:
“With a seemingly strong demand pipeline, growth of the sector should be sustained in the coming months, but difficulties in sourcing raw materials and rising cost pressures could act as a constraint on expansion.”