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Stronger growth of Italy’s manufacturing sector during June

Staff Writer | July 5, 2018
Italy’s manufacturing sector enjoyed an improvement in growth during June, with both output and new orders showing stronger gains when compared to May.
Italy manufacturing
Italy   Employment was raised at a stronger rate
Employment was also raised at a stronger rate, which meant firms were able to comfortably keep on top of their workloads.

However, cost pressures mounted amid reports of higher prices for steel and other materials used in production processes.

Moreover, optimism about the future softened to its lowest level in over five years.

The headline IHS Markit Italy Manufacturing Purchasing Managers’ Index (PMI) – a singlefigure measure of developments in overall business conditions – picked up in June, rising to 53.3 from 52.7 in the previous month.

The latest expansion was solid, and the first time that an improvement in growth has been registered since January.

Supporting the stronger PMI reading were rises in both output and new orders.

Latest data indicated that production was raised at a rate that broadly matched the survey’s trend, whilst new business increased to the greatest degree since March.

Companies reported an improvement in demand, especially from key European trading partners.

Latest data showed that consumer goods performed best in terms of output and new work during June.

In contrast, intermediate goods producers recorded a broad stagnation of production and deterioration in their order books.

Firms in this market group category also recorded the strongest increase in input prices over the month.

Latest data showed that, overall, input costs rose to the strongest degree since February amid a number of reports of higher raw material prices, especially for steel.

Whilst manufacturers were keen in general to pass these increased costs onto clients, output price inflation weakened in June to its lowest level since last September.

Meanwhile, the manufacturing labour market continued to strengthen heading towards mid-year.

Net employment rose again during June, extending the current period of growth to three-and-a-half years.

The best gain in staffing levels for three months helped manufacturers to keep on top of their workloads as signalled by a further reduction in backlogs of work.

Supply-side constraints remained evident during the month, with average lead times for the delivery of inputs continuing to lengthen.

Limited stocks, firm demand and general shipping delays were all reported.

Finally, business confidence remained in positive territory during June, but maintained its recent downward trend.

Optimism was the lowest recorded by the survey since May 2013.