Italy manufacturing activity was almost stable in October

The Italian manufacturing economy remained generally stable in October, with improved production offset by declining orders and selling prices, results from an S&P Global survey showed on Monday.

Italy manufacturing purchasing managers' index rose to 49.9 points in October from 49.0 in September, approaching the 50.0 level that separates contraction from expansion in manufacturing activity.

S&P Global said the headline reading was indicative of mixed trends, with production growth and longer supplier lead times outpacing the index of new orders, employment, and purchase inventories, which reported declining values.

Demand conditions in the Italian manufacturing sector remained subdued in October. Both total new orders and foreign orders declined, although the former declined only slightly.

In October, despite the decline in new orders, production increased slightly, reportedly driven by the acquisition of new customers and, in some cases, increased sales. Italian manufacturing companies reduced their purchases and reported having sufficient inventories to meet production needs.

Despite the reduction in demand for manufactured goods, cost pressures increased according to the sample companies as a result of higher raw material prices and shipping costs, and the rate of goods price inflation was moderate and the strongest since March.

Finally, when asked for their views on the next 12 months, Italian manufacturing companies were optimistic about an increase in production levels, with confidence reaching the highest level in 14 months. Companies expressed hope for the acquisition of new customers and higher order intake, also citing the launch of new products as a source of optimism.

The PMI survey features a panel of 400 manufacturers in Italy. Responses were collected between October 9 and 24. Services data will be out Wednesday.