Italy: Manufacturing sector gains steam for the first time since January in June
The IHS Markit manufacturing Purchasing Managers’ Index (PMI) came in at 53.3 in June, above May’s 52.7. The index thus moved further above the crucial 50-point threshold that separates expansion from contraction in the manufacturing sector, where it has been for nearly two years.
June’s result came on the back of faster growth in output and new orders, which gained speed from May’s over one-and-a-half-year low pace of expansion. Growth in output and new orders was helped by stronger demand, especially from key European trading partners. Backlogs of work continued to decline, as companies hired staff at the fastest pace in three months; companies have created new jobs for three-and-a-half years. In terms of price developments, input costs rose at the quickest pace since February due to higher prices for steel and other raw materials. This translated into rising output prices, whose pace of increase nevertheless decelerated to a nine-month low. Lastly, business confidence was the lowest in over five years, although it remained in positive territory.
Paul Smith, Director at IHS Markit, commented:
“The improvements in growth to broad trend rates will raise hopes that the sector will now settle into a steady expansionary rate following the sharp slowdown in sector performance seen since the start of the year.”