Latest data released by Markit - 3 August 2020
- Prior 47.5
Italian factory activity rebounds in July and moves back into expansion territory (>50) with output rising for a second month in a row alongside the first uptick in new business activity i.e. order book volumes for two years.
That said, much like other spots in the euro area, the labour market poses a big threat to the pace of the recovery and will continue to be the spot to watch in the coming months.
Markit notes that:
"Latest data point to an improving landscape for the Italian manufacturing sector, with operating conditions improving for the first time since mid-2018. Factory production rose again and at a quicker rate in July, amid the first uptick in new business for two years.
"Factories and production lines continue to operate below capacity and limit working hours, however, with manufacturing employment declining for the fourteenth month in a row as a result. Foreign demand also remained a source of weakness, with new export orders falling further.
"Overall, July data appear to suggest the sector is on it's way to recovery, with output expectations also remaining positive. But, after such an extreme blow, there is masses of ground to make up. It is essential that demand conditions continue to improve, and any reintroduction of lockdown measures due to a "second wave" of the pandemic has the potential to derail the recovery."
