August 01, 2024 at 08:45AM
Manufacturing PMI 47.4 vs. 46.1 expected and 45.7 prior.
Key findings:
Softer contractions recorded for new orders and production.
Strongest input price inflation since late 2022.
Lowest confidence levels this year so far.
Comment:
Commenting on the PMI data, Dr Tariq Kamal Chaudhry Economist at Hamburg Commercial Bank, said:
“The Italian industry is on a path to recovery. In July, the HCOB Manufacturing PMI made a significant leap towards growth,
reaching 47.7 index points. Despite this progress, the Italian manufacturing industry remains in contraction territory for the
fourth consecutive month.”
“Order intakes both at the total level and from foreign markets are falling at a sharp pace, with only a slight easing from
June. As a result, it is understandable that surveyed companies are reluctant to hire new staff. Reports from Italian industrial
firms indicate that the decline largely reflects non-replacement of departing employees and, in some cases, reduced
workloads.”
“Input price inflation has returned. This marks a turn in the tide, as PMI data show that input prices, which had continuously
fallen from early 2023 to March 2024, have accelerated in recent months. Rising raw material and energy costs were cited
as reasons for the increase in expenses, according to survey respondents. However, companies are unable to pass these
higher purchasing prices on to their customers, which will be a concern for businesses.”
“Looking ahead, the situation has deteriorated. Order backlogs and purchase volumes continued to shrink, despite the
indices showing a marked increase compared to the previous month. Future output has now fallen below the historical
average, yet optimism prevails. The hope for greater political stability and an economic recovery generally fostered a sense
of optimism.”
This article was written by Giuseppe Dellamotta at www.forexlive.com.
