Italian Manufacturing Costs Rise Sharply in May, PMI Data Reveals Ongoing Pressures
Rising Costs and Economic Outlook in Italian Manufacturing Sector
Input Cost Inflation Accelerates
ROME, June 1 (Reuters) - Cost pressures in Italy's manufacturing sector rose for a fifth month running in May, fuelled by the conflict in the Middle East, a survey showed on Monday.
The measure of input cost inflation in the Italian S&P Global Manufacturing Purchasing Managers' Index (PMI) accelerated to 76.5 from 75.4 in April, the highest reading since May 2022.
Italian consumer price inflation jumped to 3.3% in May, preliminary data showed last week, as energy costs surged.
Manufacturing Activity and Orders
PMI and Output Trends
The headline PMI, a broader gauge of manufacturing activity, rose to 52.9, its highest level in more than four years, from April's 52.1, climbing further above the 50-mark that separates growth from contraction.
A Reuters survey of nine analysts had pointed to a 51.9 reading in May.
New Orders and Output Sub-Indexes
The new orders sub-index rose to 51.2 from 49.1 in April to post its highest reading in six months, while the output sub-index reached 53.2 from 52.4 the month before, a level not seen since March 2023.
Stockpiling and Future Demand Concerns
The improvement in order book volumes probably "reflected clients' attempts to build safety reserves due to shortages and expected price increases," S&P Global said in its report, suggesting that concerns remained around the Middle East conflict.
"This new improvement in demand seen across the sector is likely to be unsustainable when the boost from stockpiling inevitably fades," said S&P Global economist Eleanor Dennison.
Government Economic Forecasts
Prime Minister Giorgia Meloni's government in April cut its economic growth outlook to 0.6% for this year and next from previous targets of 0.7% and 0.8% respectively.
The government forecast a 0.8% growth rate for 2028, which would mark six consecutive years of sub-1% growth.
Reporting Credits
(Reporting by Antonella Cinelli, editing by Gavin Jones and Toby Chopra)
