2 Feb 2015
Four-month high for Italy manufacturing PMI
FXStreet (London) - The headline Markit/ADACI Italy Manufacturing Purchasing Managers’ Index registered at a four-month high of 49.9 in January, up from December’s 19-month low of 48.4. The biggest gains came from output and employment.
According to the Markit report, having fallen throughout the final quarter of 2014, the level of output at Italian manufacturers returned to expansion in January. That said, growth was only modest overall and confined to the consumer goods sector.
Weighing on production levels was a further decrease in new orders at manufacturers, the level of which has now fallen for four consecutive months. Although less marked than in December, the rate of decline was still notable. That was despite a solid and accelerated increase in new business from abroad in the sector - the sharpest since last September.
Phil Smith, economist at Markit, said: “January’s survey results are mildly positive at first glance, with the headline PMI registering its best reading in four months amid slight growth in output and employment. However, there remains an undercurrent of weak domestic demand which is helping to drive down manufacturers’ output prices and further eroding profitability.
“Input costs fell in January, relieving some of the pressure on margins, though a more stable outlook for oil prices and the recent plunge in the euro are likely to halt the decline. The flip-side of a weaker euro is that it will benefit exports, an area in which Italian manufacturers have already been faring relatively well.”
According to the Markit report, having fallen throughout the final quarter of 2014, the level of output at Italian manufacturers returned to expansion in January. That said, growth was only modest overall and confined to the consumer goods sector.
Weighing on production levels was a further decrease in new orders at manufacturers, the level of which has now fallen for four consecutive months. Although less marked than in December, the rate of decline was still notable. That was despite a solid and accelerated increase in new business from abroad in the sector - the sharpest since last September.
Phil Smith, economist at Markit, said: “January’s survey results are mildly positive at first glance, with the headline PMI registering its best reading in four months amid slight growth in output and employment. However, there remains an undercurrent of weak domestic demand which is helping to drive down manufacturers’ output prices and further eroding profitability.
“Input costs fell in January, relieving some of the pressure on margins, though a more stable outlook for oil prices and the recent plunge in the euro are likely to halt the decline. The flip-side of a weaker euro is that it will benefit exports, an area in which Italian manufacturers have already been faring relatively well.”