Italy's manufacturing PMI improves, sector still struggles

The HCOB Italy Manufacturing PMI increased to 46.2 in December 2024, up from 44.5 in November and exceeding expectations of 44.8.

Italy's manufacturing PMI improves, sector still struggles

However, the reading still reflects a significant contraction in the manufacturing sector, driven by ongoing declines in output and new orders, particularly in industries such as automotive, alongside weak export demand. New export orders dropped for the 21st consecutive month. While cost pressures moderated, input prices rose for the first time in three months due to higher material and transport costs. In response, firms reduced employment and cut back on input purchases while destocking continued at one of the fastest rates on record.

Manufacturers show increased optimism for future recovery

Despite these hurdles, manufacturers expressed greater optimism for the future, anticipating a recovery in demand and international conditions, leading to the highest confidence level since August 2024.