Italy October manufacturing PMI 49.9 vs 49.3 expected | investingLive

• Prior was 49.0
• Full report here

Key findings:

• Output volumes up marginally, despite fractional drop in order books
• Cost pressures intensify as charges discounted
• Confidence improves to strongest in over a year

Comment:

Commenting on the PMI data, Nils Müller, Junior Economist at Hamburg Commercial Bank, said:

“October’s PMI data suggest that Italy’s manufacturing sector may be approaching a turning point. The headline index rose
to 49.9, up from 49.0 in September, signalling a near-stabilisation in operating conditions. Although the sector remains in
mild contraction, a notable improvement in business confidence hints at a shift in momentum.

“Output returned to modest growth, supported by new customer acquisitions and selective increases in sales, even as
overall demand remained subdued. New orders continued to decline, albeit only fractionally, while export sales fell for a fifth
consecutive month, weighed down by weaker demand from key markets such as France and Germany. Despite this, firms
were able to reduce backlogs at a sharp pace, indicating that production capacity exceeded incoming workloads.
Employment edged lower, though this was largely due to voluntary departures and contract expirations rather than active
downsizing.

“Input cost inflation accelerated to a seven-month high, driven by rising raw material and shipping prices. Notably, some
firms also reported that suppliers had increased their fees given tariff implications. Nonetheless, firms opted to reduce their
selling prices in an effort to stimulate demand amid strong competition. The rate of discounting was the steepest in eight
months, underscoring the pressure on margins and the challenging pricing environment.

“Encouragingly, business confidence improved markedly, reaching its highest level in over a year. Over half of surveyed
firms anticipate higher output in the coming 12 months, buoyed by expectations of new client wins, stronger order inflows
and product launches. While the sector remains in a fragile state, overall, the data point to a cautiously improving outlook.”