FX.co ★ Italy Factory Activity Deteriorates In April

The manufacturing sector in Italy reverted to a phase of contraction in April, following a modest expansion in the preceding month, according to survey results published by S&P Global last Thursday.

The HSBC Manufacturing Purchasing Managers' Index, which is seasonally adjusted, slipped to 47.3 in April, a decrease from March's 50.4. This index uses a benchmark of 50; a score below this number signifies contraction.

The downturn was due to a marked reduction in new orders in April, reflecting the prevalent weak demand conditions throughout the sector. This decrease was particularly noticeable in new export orders, which significantly dropped as a result of lower demand from European markets.

Consequently, Italian businesses curtailed their output levels consistently in April. However, despite multiple challenges, Italian manufacturers remained hopeful regarding their employment plans. The survey recorded sustained job growth within the sector in April, albeit at a slower pace than previously.

The decrease in input demand contributed to enhancing vendor performance, as businesses started to notice a reduction in capacity pressure at suppliers.

In terms of pricing, input costs saw an increase for the first time since January 2023 due to rising raw material expenses. Despite this upward trend in input prices, selling prices remained largely unchanged on a monthly basis.