ROME – Italy’s manufacturing sector contracted for a fourth month running in October, with activity posting its steepest decline since May 2020 when the economy was struggling with COVID-19 lockdowns, a survey showed on Wednesday.
The S&P Global Purchasing Managers’ Index (PMI) for Italian manufacturing came in at 46.5, down from 48.3 the month before and sharply below the 50 mark that separates growth from contraction.
The reading was below a median forecast of 46.9 in a Reuters survey of 14 analysts.
The contraction was driven by weakness in both output and new orders, with the former subindex coming in at 44.1 from 44.2 and the latter slipping to 39.2 from the previous 43.2.
“Weak demand was a key factor behind firms’ decisions to postpone or cancel purchases, reflected in a marked drop of buying activity and subsequently, a fall in pre-production inventories,” said Lewis Cooper, economist at S&P Global Market Intelligence.
Despite the weakness in manufacturing, the Italian economy performed better than expected in the third quarter, national statistics bureau ISTAT reported on Monday.
Its preliminary estimate showed gross domestic product rose 0.5% from the previous three months and was up 2.6% on a year-on-year basis, easily beating forecasts.