Italy April manufacturing PMI 47.3 vs 50.0 expected

• Prior 50.4

That’s a bummer as Italy’s manufacturing sector slips back into contraction in April. There were renewed declines in output and new orders, with input prices also rising for the first time since January 2023. HCOB notes that:

“The manufacturing sector in Italy has taken a step backward. In April, the HCOB Manufacturing PMI dropped after just one
month of surpassing the 50.0 mark. This indicates that the economy may not be on as strong a recovery path as previously
thought. The downward risks posed by input price inflation and interest rates continue to make life difficult for the Italian
industry.

“There’s a lot of shadow and little light. To glean optimism from the numbers, one must look closely. The Employment Index
fell in April compared to the previous month but is still showing growth. However, if weak demand for Italian manufactured
goods persists, the uptick in hiring could be reversed. Another source of optimism is the improvement in supplier delivery
times despite ongoing tensions in the Red Sea. However, the significant easing of supply chains also reflects the weak
demand situation.

“Inflation concerns resurface in the industry. The recent weakness in demand is compounded by rising input prices. A look at
the oil markets reveals that geopolitical tensions in April, for example, briefly pushed the price of Brent crude even above
$90 per barrel. According to surveyed industrial companies, output prices had to be lowered due to weak demand. While the
Output Prices Index increased compared to the previous month, it remains in contraction territory for now.

“The outlook is mixed. Both total and foreign order intakes have significantly declined compared to the previous month. The
contraction, especially in new export orders, is concerning and should continue to be closely monitored. Surprisingly, the
Future Output Index is significantly above its historical trend. Surveyed companies cite hopes for a market recovery as the
primary source of their optimism.”

This article was written by Justin Low at www.forexlive.com.