Italy manufacturing activity contracts for 3rd month running – PMI

ROME (Reuters) – Italy’s manufacturing sector contracted for a third month running in September, a survey showed on Monday, with inflationary pressures and uncertainty over the economy hitting order volumes.

The S&P Global Purchasing Managers’ Index (PMI) for Italian manufacturing came in at 48.3, slightly up from 48.0 the month before but below the 50 mark that separates growth from contraction.

The reading was above a median forecast of 47.5 in a Reuters survey of six analysts.

The continued contraction was driven by weakness in both output and new orders, with the former subindex coming in at 44.2 from 47.0 and the latter standing at 43.2 against a previous 42.6.

“Output declined at a quicker pace amid a fifth consecutive monthly fall in new work, linked to weak client demand driven in turn by surging prices and heightened uncertainty,” said Lewis Cooper, economist at S&P Global Market Intelligence.

Last week, the outgoing government of Prime Minister Mario Draghi said GDP would expand 3.3% in 2022, up from a 3.1% forecast set in April, but slashed 2023 economic growth forecast to 0.6% from 2.4% due to sky-high energy costs.

Giorgia Meloni is expected to replace the former European Central Bank chief Mario Draghi as prime minister by the end of October after leading a right-wing alliance to victory at elections on Sept. 25.

(Reporting by Crispian Balmer; Editing by Hugh Lawson)