- Prior 50.6
A fresh drop in output and new orders mark a setback for Italy’s manufacturing sector in December. The good news at least is that cost pressures were seen easing but employment conditions also suffered on the month. On the latter, manufacturers made further cutbacks to their workforce numbers, signalling a full quarter of job shedding. Tough. HCOB notes that:
“The year concluded with Italian manufacturing sliding back into contraction, as the HCOB Manufacturing PMI fell to 47.9 in
December, down sharply from November’s 50.6. The latest reading marks the steepest deterioration in operating conditions
since March, abruptly ending the brief growth spurt seen in the previous month. The downturn was driven primarily by
renewed declines in output and new orders, both of which contracted at the fastest pace in nine months.
“Weakness was broad-based, with consumer goods producers reporting the sharpest fall, while challenges in steel and
automotive sectors caused notable headwinds. Export orders also slipped, confirming November’s rebound as short-lived,
though the pace of decline remained modest compared to earlier in the year. In response to subdued sales, firms scaled
back production and continued to trim employment, marking a full quarter of job shedding. Firms also pared back purchasing
and ran down input inventories to match weaker production needs.
“On the cost front, softer demand helped ease inflationary pressures, with input price growth cooling from November’s threeyear high. This allowed manufacturers to offer slight discounts, although price cuts were only fractional. Despite the
challenging backdrop, sentiment improved marginally, supported by plans for new product launches and market expansion
in 2026. Overall, December’s data confirm ongoing challenges for Italy’s manufacturing economy, with subdued domestic
and external demand likely to weigh on near-term performance, even as firms look ahead with cautious optimism.”
This article was written by Justin Low at investinglive.com.