Italy: Manufacturing PMI rises but remains below threshold in July
The HCOB Italy Manufacturing Purchasing Managers’ Index (PMI) rose to 47.4 in July from 45.7 in June. As a result, the index remained below the 50.0 no-change threshold, signaling a softer deterioration in manufacturing-sector operating conditions compared to the previous month.
The easing of the manufacturing sector downturn in Italy was primarily driven by a slower rate of decline in new orders and output. Employment levels continued to be trimmed, albeit at a marginal pace, as firms managed spare capacity and unfinished business more efficiently. Additionally, their reluctance to purchase new inputs lessened, with the decline in quantities of purchases being the least pronounced since March 2023.
On the cost front, price pressures intensified in July, with input price inflation reaching a 20-month high due to increased energy and raw material costs. However, firms opted to slightly reduce their selling prices for the seventeenth consecutive month. Meanwhile, business sentiment among manufacturers was mixed, with nearly half expecting output growth over the coming year, driven by hopes of stable economic and political conditions plus new product launches. However, the degree of positive sentiment was the weakest recorded in 2024 to date.