HCOB Italy Manufacturing PMI fell to 46.6 in March 2025 from 47.4 in February, coming in below forecasts of 48. The data indicated that the Italian manufacturing sector remained stuck in a prolonged downturn, now deteriorating for 12 consecutive months. The persistent weakness in the sector underscores the challenges faced by manufacturers amid subdued demand and ongoing economic uncertainties.
Italy manufacturing PMI falls in March
Production volumes declined once again, with the pace of contraction accelerating to its fastest rate in four months. New orders continued to fall at a sharp and steady pace, highlighting sustained weakness in both domestic and export demand. Firms remained in retrenchment mode, adopting a cautious stance as they braced for prolonged market difficulties.
As part of their cost-cutting efforts, companies sought to reduce expenses by scaling back employment and cutting spending on inputs. Workforce reductions reflected a broader strategy to streamline operations amid a lack of new business, while lower input purchases suggested a preference for running down existing inventories rather than restocking.
Cost pressures ease
On the pricing front, cost pressures showed signs of easing slightly, providing some relief to manufacturers. However, in an effort to protect margins amid weak demand and rising operational costs, firms raised output prices for the first time in seven months. This move suggests that despite softer input price inflation, businesses are feeling pressure to maintain profitability in an increasingly challenging environment.
Looking ahead, sentiment in the sector remains cautious, with firms wary of ongoing economic uncertainties, fluctuating energy costs, and weak demand conditions. While some stabilization in price trends may offer slight relief, the overall outlook remains fragile, with manufacturers likely to face continued headwinds in the coming months.
