Italy Manufacturing Sentiment at 3-Month High

Italy’s manufacturing confidence indicator remained unchanged at 91.9 in October 2026, falling short of market expectations of 92. Manufacturers reported improving assessments of order books and production expectations, although inventories of finished goods were seen as accumulating, suggesting demand may not be keeping pace with output. In contrast, overall business confidence strengthened, with the composite indicator rising to 96.6 from 95.9. The improvement was driven by market services, where confidence increased to 99.6 from 97.1, and construction, where the index edged up to 97.8 from 97.5. However, sentiment deteriorated in retail trade, with confidence falling to 100.7 from 104.3, indicating weaker conditions in the sector.

Italy’s manufacturing confidence indicator rose to 91.9 in September 2026 from an upwardly revised 90.2 in August, surpassing market expectations of 90.5 and reaching its highest level since April 2023. The reading points to a continued improvement in manufacturing sentiment, supported by better assessments of current demand and production conditions. Manufacturers’ assessments of total orders improved (-13.5 vs -19.6), driven in part by a notable pickup in foreign orders (-19.1 vs -23.4). Views on current production levels also firmed (-13.7 vs -16.2). Looking ahead, employment prospects increased (3.3 vs 1.5), suggesting more positive hiring intentions among manufacturers. However, production expectations weakened (8.9 vs 9.6), while price expectations increased (17.1 vs 15.5), primarily due to the recent surge in oil prices amid ongoing tensions in the Middle East.

Italy’s manufacturing confidence indicator rose to 89.9 in August 2026, the highest level since June 2023, from 89.7 in July and broadly in line with expectations. Despite the improvement in overall sentiment, firms reported a more negative assessment of total orders (-20.4 vs -17.1), driven by weaker expectations for foreign orders (-23.9 vs -22.1). Views on current production also deteriorated (-19.6 vs -17.8), while inventory accumulation increased further (3.8 vs 2.8). Looking ahead, production expectations improved to 9.6 from 4.5, although edged higher to 15.5 from 15.3. Expectations for future employment weakened, with the indicator falling to 1.5 from 4.4. Meanwhile, Italy’s overall business confidence indicator increased to 96.9 from 95.7, supported by improving sentiment across sectors, particularly construction.