- Manufacturing PMI 48.3 vs. 49.0 expected and 49.4 prior.
Key findings:
- Sharper decline in production volumes in September.
- Total new orders down markedly, with exports falling sharply.
- Cost pressures cool notably, while charges discounted slightly.
Comment:
Commenting on the PMI data, Jonas Feldhusen, Junior Economist at Hamburg Commercial Bank, said:
“The situation in Italy's manufacturing sector remains grim. While the headline index saw a slight improvement in August, it has now dropped again in September, remaining firmly in recessionary territory. The global downturn in manufacturing activity, which has worsened in the third quarter, is clearly impacting Italian manufacturers.
Competition from abroad, political uncertainty in Germany and France, along with high interest rates and cautious consumers due to elevated prices, seem to be dampening demand. In accordance with this, incoming orders from both the domestic and international markets have fallen significantly. With new orders falling by a greater margin than output, factories saw a build-up of inventories for the first time in months.
Italian manufacturing businesses are becoming more cautious about their future prospects. The weak demand environment is pressuring the industrial sector, as reflected in future business expectations, which have dropped below their historical average. However, there are some positive developments. Despite lower backlogs of work, Italy's manufacturers accelerated hiring in September. Price pressures are easing.
While raw materials still present some cost challenges, input price inflation has cooled down. This trend, along with weakening demand, appears to be influencing prices charged. As a result, companies attempted to reduce prices slightly in order to stay competitive. This closes the gap between input and output prices somewhat.”
