- Manufacturing PMI 44.5 vs. 45.7 expected and 46.9 prior.
Key findings:
- Sharper declines in new orders and output
- Steep drop in purchasing activity helps cost pressures cool
- Most pronounced depletion in backlogged work for over 15 years
Comment:
Commenting on the PMI data, Jonas Feldhusen, Junior Economist at Hamburg Commercial Bank, said:
“The Italian manufacturing sector is plummeting. With the headline index deteriorating from 46.9 in October to 44.5 in November, the situation is serious. The subdued orders situation, both domestic and abroad, is the main driver for the poor performance in November. Orders are collapsing. Given the political uncertainty, which further increased in Berlin and Paris last month, it’s no surprise that enterprises and consumers are postponing or even cancelling their investments. Consequently, producers are cutting back on their production.
Lower levels of new work and the general slowdown kept production weak. Contrary to what one might expect, manufacturers are still optimistic about their future output. But put into historical context, the outlook is still rather weak. Against this backdrop, manufacturers are cutting their workforce numbers. The automotive industry is particularly hit. Competition from China and low demand for EVs are dampening sales, with news reports emerging of some plants temporarily stopping production. This is reflected in another downturn of the Investment Goods PMI, which incorporates the automotive sector.
Anecdotal evidence shows that some firms are hoping for more stable conditions following the US election. But given Trump's announced tariff policy, it's wise to be cautious about expecting business conditions for Italian industrialists to get better under his administration, especially for those companies who heavily rely on exports to the US. We assume that tariff implementation could particularly impact countries like Germany and Italy, as they are especially vulnerable due to their heavy reliance on manufacturing and its external demand.”
