Latest data released by Markit - 1 July 2020
- Prior 45.4
Even as lockdown ends, Italian factory activity is still in contraction territory but have shown tentative signs of improvement at least.
Looking at the details, factory output actually increased for the first time since July 2018 as plants start to reopen with firms working through unfinished orders to clear the backlog. Meanwhile, order book volumes continue to fall but at a less steep pace.
Markit notes that:
"The Italian manufacturing sector remained in a downturn during June, although the deterioration in the health of the sector eased further, and was the softest for four months, as lockdown restrictions were loosened and more of the economy reopened. Factory production increased for the first time since July 2018, although the rise was only mild.
"Demand conditions remained weak, however, with total order book volumes dropping for the twenty-third month in a row. Although still solid overall, the reduction in new orders eased further and was the slowest since February. June data also highlighted another round of job cuts, with companies continuing to report lay-offs and forced redundancies.
"Encouragingly, confidence among Italian manufacturers with regards to output over the year ahead improved again, with sentiment climbing to a near five-year high. Although the improvement in firms' confidence is a step in the right direction and the downturn has eased, the Italian manufacturing sector is still facing a rocky path to recovery as demand needs to improve considerably for growth to return in a meaningful manner."