Finance
Italian manufacturing contracts for second straight month in January, PMI shows
Published by Global Banking and Finance Review
Posted on February 2, 2026
2 min readLast updated: February 2, 2026
Quick Summary
Italy's manufacturing sector contracted again in January, with PMI at 48.1. Employment trends show signs of recovery.
Italy's Manufacturing Sector Contracts for Second Consecutive Month
Overview of Italy's Manufacturing Performance
ROME, Feb 2 (Reuters) - Italy's manufacturing sector contracted for a second month running in January, albeit at a marginally slower pace than in December, a survey showed on Monday, offering little prospect of any near-term economic rebound.
PMI and Economic Indicators
The Italian HCOB Manufacturing Purchasing Managers' Index (PMI) edged up to 48.1 from December's 47.9, in line with a median forecast in a Reuters poll of six analysts and remaining below the 50 mark that separates growth from contraction.
Employment Trends in Manufacturing
Hamburg Commercial Bank AG economist Nils Muller saw positive signs in some of the survey's components.
Government Growth Targets
"The softer falls in both output and new orders suggest that the intense weakness seen late last year may be easing," he said.
The new orders sub-index stood at 47.4 and output at 47.1, up from respectively 47.0 and 46.8 in December.
The employment indicator pointed to expansion for the first time in four months, rising significantly to 50.6 from 48.2.
The euro zone's third-largest economy grew by 0.3% in the fourth quarter of last year from the previous three months, slightly firmer than expected, ISTAT reported on Friday.
Italy's government has a full-year growth target of 0.7% for this year after an estimated 0.5% rate in 2025.
(Reporting by Antonella Cinelli, editing by Gavin Jones and Toby Chopra)
Key Takeaways
- •Italy's manufacturing PMI rose slightly to 48.1 in January.
- •Sector remains in contraction, below the 50 growth threshold.
- •Employment indicator showed expansion for the first time in months.
- •New orders and output indices improved slightly.
- •Italy's economy grew by 0.3% in the last quarter of the previous year.
Frequently Asked Questions about Italian manufacturing contracts for second straight month in January, PMI shows
1What is PMI?
PMI stands for Purchasing Managers' Index, a measure of the prevailing direction of economic trends in manufacturing and service sectors.
2What is GDP?
GDP, or Gross Domestic Product, is the total value of all goods and services produced in a country over a specific time period.
3What are economic indicators?
Economic indicators are statistics that provide information about the economic performance of a country, such as GDP, unemployment rates, and inflation.
4What are new orders in manufacturing?
New orders refer to the total value of new contracts received by manufacturers, indicating future production activity.
5What is employment trend in manufacturing?
Employment trends in manufacturing refer to changes in job levels within the manufacturing sector, reflecting economic conditions and demand for products.
