Italy’s manufacturing sector stops the rot and marginally grows for the first time in a year. A renewed growth in both output and new orders were the contributing factors. HCOB notes that:
“Italy’s manufacturing sector can breathe a sigh of relief. After nearly a year-long struggle, the HCOB PMI has exited the
contraction zone in March. With an index reading of 50.4, Italy now joins Spain as the second of the four largest economies
in Europe to surpass the threshold of 50. Output saw a significant jump compared to the previous month.
“Orders in the Italian industry are picking up momentum. However, it’s noticeable that while total demand grows,
international demand shrinks. Surveyed companies noted subdued demand from abroad, particularly in European markets.
“Not everything is good in the Italian manufacturing sector. Inventory levels, which appeared to be on the path to recovery
last month, have shown a clearer decline in March. Both purchasing quantities and the stock of manufactured products are
continuing to shrink. This suggests that the momentum in the industry is not yet built on a solid foundation.
“Italian industrialists are feeling pretty good about what lies ahead. Future output expectations have expanded further
compared to last month and are comfortably above the historical average. While there’s a sense of optimism among
surveyed companies, there’s also a lingering worry about ongoing geopolitical risks, which seem to be sticking around.
Nevertheless, employment conditions remain robust, with increasing numbers of hires being made.”