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Italy PMI November 2019

Italy: Manufacturing sector remains in the doldrums in November

The IHS Markit manufacturing Purchasing Managers’ Index (PMI) dipped to 47.6 in November from 47.7 in October. The index thus moved further below the crucial 50-threshold that separates expansion from contraction in the manufacturing sector, where it has been for over one year.

The deterioration in the headline PMI came mainly on the back of a sharper decline in new orders. New orders—including new exports orders—continued to decrease, and did so at the sharpest pace since March. Weakening demand conditions were observed especially in the automotive sector and among metal customers. Moreover, new export orders contracted at the fastest clip since December 2011, due to faltering demand from Eastern Europe and the Middle East. Meanwhile, output fell for the 16th month in a row, although at a somewhat softer stride. As a consequence of lower output and new orders, manufacturers reduced their staff count for the sixth consecutive month, while backlogs of work declined for the 20th month running. On the price front, input costs declined due to lower prices for raw materials; in a bid to remain competitive, firms cut their output prices as a result. Lastly, business confidence fell to a near seven-year low but remained in optimistic terrain.

Commenting on the release, Amritpal Virdee, an economist at IHS Markit, remarked:

“The weakness seen for a long time across the investment and intermediate goods sectors is also showing signs of spreading to consumer products category”.

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