Italy: Manufacturing sector in dire state in March
April 1, 2019
The IHS Markit manufacturing Purchasing Managers’ Index (PMI) dipped to 47.4 in March from February’s 47.7, marking the worst reading in close to six years. The index therefore moved further below the crucial 50-point threshold that separates expansion from contraction in the manufacturing sector, where it has been for six months in a row.
The deterioration in operating conditions came on the back of falling production and plunging new orders, both of which recorded the eighth consecutive month of contraction. New orders contracted at the sharpest pace since May 2013 on the back of fading domestic and external demand, which translated into another month of contraction in output. Moreover, manufacturers shed some staff, although at an unremarkable pace, while inventories of finished goods increased at a strong pace. Input costs, meanwhile, rose, although at a softer pace than in February, fueled by higher prices for raw materials. This led firms to increase output prices. Lastly, business confidence dipped, motivated by somewhat gloomier expectations on market trends going forward.
Italy Fixed Investment Forecast
FocusEconomics Consensus Forecast panelists see fixed investment growing 2.1% in 2019, which is unchanged from last month’s estimate. For 2020, the panel expects fixed investment to increase 1.8%.