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PMIs Suggest Manufacturing Price Pressures Falling Fast


ITALY JUL MANUF PMI 44.5 (FCST 44.3); JUN 43.8

  • Italian manufacturing PMI recovered modestly in July at 44.5 versus 44.3 in June, and bested consensus of 43.8, but the sector remains firmly in contractionary territory.
  • This was the 4th consecutive month, and the 10th in 13, below the 50 level.
  • As with elsewhere in the Eurozone, the HCOB / S&P Global report noted weakness in both output and new orders (noted to be falling at "historically steep rates amid evidence of a challenging market environment").
  • Despite poor demand conditions, hiring continued, "in part reflecting the fulfilment of long-held vacancies and some confidence in the future" - the latter including expected recovery of demand over the next 12 months.
  • But overall, the weakness in activity translated into very disinflationary conditions: input and output costs fell the most in over 14 years as there was a "broad-based correction in input prices" and "strong market competition and a willingness to pass on cost savings to clients".

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