Italy's ailing manufacturing sector shows signs of stabilisation, PMI shows

ROME (Reuters) -Italy's manufacturing sector showed tentative signs of stabilisation in May, as output rose slightly for the first time in over a year despite continued weakness in new orders, a survey showed on Monday.

The HCOB Italy Manufacturing Purchasing Managers' Index (PMI) edged down marginally to 49.2 in May from 49.3 in April, remaining below the 50.0 mark that separates growth from contraction for a 14th straight month.

The survey showed a slight increase in output, with the relevant sub-index coming in at 50.3, against 49.9 the month before.

"Italy's manufacturing sector showed further signs of stabilisation in May," said Nils Müller, junior economist at Hamburg Commercial Bank AG.

"While it dipped marginally from April, the underlying dynamics suggest a sector cautiously emerging from a prolonged downturn."

New orders declined for a 14th consecutive month, though the pace of contraction was the softest in over a year, while employment in the sector also decreased in May but at a slower rate than the month before.

The Italian government is forecasting 2025 economic growth of 0.6%, broadly in line with the 0.7% rate seen in the last two years.

(Reporting by Angelo Amante, editing by Gavin Jones and Toby Chopra)