Italy: PMI weakens in July
August 1, 2016
The IHS Markit manufacturing Purchasing Managers’ Index (PMI) dropped from 53.5 in June to 51.2 in July, marking the lowest reading since January 2015. Nevertheless, the index remains above the 50-threshold that separates expansion from contraction in the manufacturing sector.
July’s result mainly reflected a weakening in the growth rates of output, new orders and exports. Nonetheless, employment in July expanded for 19 months in a row, while manufacturers’ purchasing activity grew at the weakest pace in five months. Regarding price developments, while input prices increased, output charges diminished, placing further pressure on firms’ profits. Phil Smith, Economist at IHS Markit, added that, “the manufacturing economy started the third quarter on a softer footing, with the rate of expansion in output easing to an 18-month low amid a considerable slowdown in growth of new orders.”