Italy: PMI loses some ground in May
June 1, 2017
The IHS Markit manufacturing Purchasing Managers’ Index (PMI) dropped to 55.1 in May from 56.2 in April, which had marked the highest reading in over six years. The index nevertheless remained comfortably above the 50-point threshold that separates expansion from contraction in the manufacturing sector.
May’s result mainly reflected softer growth in new orders and output, with the latter expanding at the slowest rate in four months. New orders grew for the ninth consecutive month, with the pace of growth easing only slightly compared to April, while new export orders also rose substantially thanks to robust external demand. This translated into the strongest rate of job creation since October 1999, although despite this backlogs of work rose. Regarding price developments, input prices continued to rise, albeit at a slower pace, on the back of higher prices for raw materials. This led to a further rise in output prices.
Phil Smith, Economist at IHS Markit, added that, “arguably the best piece of news came on the employment front, with manufacturers reporting a near-record rate of job creation as part of efforts to bring capacity more in line with higher demand.”