Italy Manufacturing Growth Hits Four-Year High

Italy’s manufacturing PMI fell to 49.4 in October 2026 from 50.4 in September, below expectations of 50.2 and marking its weakest reading since January. The decline reflected subdued demand, with new orders falling for a fourth consecutive month and production contracting at its fastest pace since the start of the year. Geopolitical uncertainty continued to weigh on customer demand, while manufacturers also reduced purchasing activity and cut employment for the first time since July. Firms further lowered inventories, preferring to maintain leaner stocks despite persistent supply-chain disruptions. Delivery times lengthened at the sharpest rate in three months. Meanwhile, inflationary pressures intensified, reaching a four-month high. Companies passed some of these increases on to customers, pushing selling-price inflation to its highest level in three months. Despite continued optimism about the year ahead, business confidence weakened.

The S&P Global Italy Manufacturing PMI rose to 50.4 in September 2026 from 49.6 in August, above market expectations of 50. The index moved back above the 50.0 threshold, indicating a marginal expansion in manufacturing activity and marking the seventh improvement in operating conditions in the past eight months. However, the recovery remained fragile, with output and new orders both declining slightly as subdued domestic and overseas demand limited production and purchasing. Export orders also fell modestly, while heightened geopolitical uncertainty discouraged investment and inflation concerns constrained activity. Supply-chain pressures persisted, with input delivery times deteriorating sharply amid logistical disruptions and shortages of key components such as electronics. At the same time, input-cost inflation accelerated to its strongest pace of the third quarter. Employment continued to increase slightly, while manufacturers remained optimistic about the next 12 months.

The S&P Global Italy Manufacturing PMI fell to 49.6 in August 2026, down from 51.3 in July and below market expectations of 51.5. The reading, though only marginally below the 50.0 threshold, marked the first deterioration in operating conditions since January, with output, new orders and purchasing stocks all weighing on the index. New orders declined for a second consecutive month and at the fastest pace in nearly a year and a half, while export orders also fell. Weaker production requirements led to the first contraction in manufacturing output in seven months, driven by a decline in intermediate goods production. Purchasing volumes also fell, posting their sharpest decline in almost a year. Supply-chain disruptions remained a key constraint amid material shortages and transport issues, although the deterioration in supplier delivery times eased to a six-month low. Meanwhile, employment continued to rise, helping underpin firms’ expectations for growth over the coming year.