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Italy’s manufacturing activity contracted in September, reversing August’s modest growth, as both production and new orders declined amid economic uncertainty, survey data showed on Wednesday.
The HCOB Italy Manufacturing PMI dropped to 49.0 in September from 50.4 in August, marking the sharpest deterioration in three months. A reading below the 50.0 threshold indicates contraction in the sector.
New orders fell at the fastest pace since June, with firms citing weaker demand across key export markets including Europe, the U.S., and Asia. Export orders declined at the quickest rate since March.
Production also contracted modestly, ending August’s brief recovery when output had expanded at the strongest pace in over two years.
Despite the downturn, employment rose for the first time in a year, supported by planned business expansions. Still, backlogs of work continued to be depleted at a solid pace, highlighting weaker demand.
On the cost front, input prices climbed at the sharpest rate since March, led by higher raw material costs, particularly copper. However, selling prices remained flat as firms refrained from passing on cost increases to maintain competitiveness.
Manufacturers cut back on purchasing activity, which fell at the steepest rate in six months. Both finished goods and raw materials inventories declined for the second consecutive month, reflecting adjustments to lower demand.
