Italian manufacturing sector ends ’24 in decline – PMI

Italy’s manufacturing sector continued to contract in December 2024, though the pace of decline softened compared to November, according to the HCOB Italy Manufacturing PMI. The PMI rose to 46.2, up from 44.5 in November, but remained below the 50.0 threshold indicating contraction.

Key factors driving the downturn included reduced output and new orders, with weak demand in key sectors such as automotive and subdued export activity.

December marked the 21st consecutive month of declining export orders. Despite easing slightly, the pace of decline in production and sales outpaced the 2024 average.

Cost pressures were historically subdued, with input prices rising for the first time in three months due to higher material and transportation costs. However, manufacturers struggled to pass these costs onto clients, resulting in only a fractional decline in selling prices.

Manufacturers implemented cost-cutting measures, reducing employment at the second-fastest rate since mid-2020 and depleting inventories at record levels. Input buying also fell sharply, contributing to improved supplier performance, though material shortages and transport delays persisted.

Despite the challenges, business confidence rose to a four-month high, with firms optimistic about improved demand and international conditions in 2025.

Attribution: Amwal Al Ghad English

Subediting: Y.Yasser