The Italian manufacturing PMI was stronger than expected at 45.7 (vs 44.3 cons, 45.6 prior), but marked the third consecutive month in contractionary territory.
Similar to Spain, rises in input cost inflation were not passed onto to consumers, with firms tightening profit margins to absorb cost increases.
Key notes from the release:
• “Amid reports of unfavourable market conditions, panellists linked the downturn to client hesitancy”.
• “There were signs that the demand environment was weak internationally, as new export orders declined at an historically elevated pace”.
• “Italian manufacturers experienced rising cost pressures, amid reports of greater raw material prices and shipping costs. The rate of input price inflation was marked and the strongest for one-and-a-half years”.
• “Despite rising costs, firms opted to discount selling prices again in order to remain price competitive”.
