Italy: PMI hits over two-decade high in March
The IHS Markit manufacturing Purchasing Managers’ Index (PMI) increased to 59.8 in March, from February’s 56.9, marking the best reading in over two decades. Consequently, the index moved further above the 50-threshold, indicating an improvement in business conditions from the previous month.
March’s upturn largely came on the back of rising output and new orders, which both expanded at the quickest rate in over three years amid improving demand. Regarding employment, firms raised staff levels amid rising backlogs of work, with the rise in employment being the sharpest since January 2018. On the price front, input cost inflation rose to the highest in nearly a decade, largely due to rising raw material costs and higher transportation fees. Moreover, output charges rose in the month as firms passed on costs to clients. Lastly, Italian firms remained confident over the outlook in the coming 12-month period, albeit sentiment eased slightly from the previous month.
Commenting on the release, Lewis Cooper, economist at IHS Markit, stated:
“With the sector showing substantial growth throughout the first quarter, it is safe to say the manufacturing recovery is well underway. If demand conditions remain strong, even in light of further lockdown measures, we are likely to see a sustained upturn through the coming months. Headwinds from supply chain issues may knock growth of course, however, and with firms already noting attempts to stock inventories to shield themselves, any further delays or shortages could disrupt production.”