Italy: Manufacturing PMI falls in May
The HCOB Italy Manufacturing Purchasing Managers’ Index (PMI) fell to a five-month low of 45.6 in May from 47.3 in April. As a result, the index moved further below the 50.0 no-change threshold, and signaled a faster deterioration in manufacturing-sector operating conditions compared to the previous month.
The decline was primarily driven by the steepest drop in new orders seen in 2024 so far, attributed to subdued demand conditions and increased uncertainty. This contraction in demand led manufacturers to reduce their production volumes for the second consecutive month and also at the quickest rate of decline year to date. Additionally, the downturn prompted firms to cut jobs and scale back on purchasing.
On the financial side, firms faced intensified inflationary pressures due to rising raw material prices. However, in an effort to stimulate sales, companies continued to lower their selling prices, extending the trend of falling charges to 15 months. Meanwhile, business sentiment dipped slightly from April’s 12-month high, although it remained above the historical average. This fall in confidence was linked to the recent order book slump, but optimism was supported by the introduction of new product lines and hopes for improved economic conditions.