Italian Manufacturing Activity Declines for Sixth Consecutive Month in September

ROME (Reuters) – Italian manufacturing activity contracted for a sixth month in a row in September, with a faster decline than the previous month, according to a survey released on Tuesday. This decline comes amid decreases in both output and new orders.

The HCOB Global Purchasing Managers' Index (PMI) for manufacturing in Italy, the euro zone's third-largest economy, fell to 48.3 from August's 49.4, sinking further below the pivotal 50 mark that distinguishes growth from contraction.

This result was under the median forecast of 49.0 from a Reuters survey of nine analysts.

"The situation in Italy's manufacturing sector remains grim. While the headline index saw a slight improvement in August, it has now dropped again in September, remaining firmly in recessionary territory," stated HCOB economist Jonas Feldhusen.

Feldhusen added that the global downturn in manufacturing activity, worsened in the third quarter, is significantly affecting Italian manufacturers. Factors such as foreign competition, high interest rates, and rising prices are contributing to decreased demand.

The manufacturing output sub-index fell to 47.4 from 49.1 the prior month, while the new orders indicator decreased even more sharply to 45.7 from 48.8.

Additionally, Italy's national statistics bureau ISTAT noted last month that the nation’s 2023 economic growth was weaker than earlier estimates but also reduced projections for the budget deficit and public debt as a proportion of output.

Italy is aiming for 1% economic growth this year and 1.2% in 2025, having revised down its deficit targets as a share of gross domestic product (GDP) for both this year and next, sources informed Reuters.