- Prior 54.5
Manufacturing output declined amid weak demand and supply issues with order book volumes also seen decreasing for the first time since late 2020. Besides that, business confidence remains muted with factory production also seen dropping for the first time since May 2020 amid shortages of inputs and weak client demand. S&P Global notes that:
"Italy's manufacturing sector felt the combined effects of sustained supply issues and weak demand conditions during May. Production declined for the first time in two years, amid reports of weak inflows of new work and issues sourcing the required inputs. Following a 17-month sequence of growth, order book volumes fell at a solid pace, with new export orders also contracting on the month. According to survey respondents, weak demand conditions were the result of heightened uncertainty and higher prices.
"Inflationary pressures were again evident in the latest data, with the rates of increase in both input costs and factory gate charges amongst the strongest on record, albeit easing to three-month lows respectively.
"Some positive news came from business confidence at Italian goods producers, which ticked up further from March's two-year low amid hopes of a rebound in demand and the easing of supply issues. That said, sentiment remained muted in the context of historical data, as the war in Ukraine and surging costs continues to concern manufacturers.
"The sector is on rocky ground mid-way through the second quarter of the year, as goods producers feel the effects of multiple headwinds including supply issues, surging inflation , rising levels of uncertainty and the subsequent knock-on impact to client demand. Should these headwinds not let up, Italy's manufacturing sector is likely set for further challenges in the months ahead."