Italy: PMI returns to expansion in September
October 3, 2016
The IHS Markit manufacturing Purchasing Managers’ Index (PMI) rose from 49.8 in August to 51.0 in September, taking it above the 50-threshold that separates expansion from contraction in the manufacturing sector.
September’s result mainly reflected a return to growth in new orders, which, in the previous month, had dropped slightly for the first time in over one-and-a-half years. The increase in new orders, mainly driven by stronger demand from abroad, prompted output levels to grow at a faster pace than in August, though the rate of expansion was modest overall. In addition, manufacturers’ purchasing activity increased, contrasting August’s decline, though in this case too the rate of growth was minimal. Regarding price developments, input prices increased, most likely reflecting higher prices for metals, while output charges diminished for the ninth consecutive month.
Phil Smith, Economist at IHS Markit, added that, “September was a better month for Italian manufacturers, with an export-led increase in new orders driving slightly stronger production growth and job creation. However, the performance across the third quarter as a whole was disappointing, as the PMI recorded its three lowest readings seen since the start of 2015.”