Published: Thu, May 03, 2018
Finance | By Gustavo Carr

Italy April factory activity growth weakest since Jan 2017 - PMI

Italy April factory activity growth weakest since Jan 2017 - PMI

However, the report cautioned that there were still signs that "demand across the construction sector remained subdued, with total new work rising only marginally in April".

The Purchasing Managers' Index (PMI), released by IHS Markit, for the month of April saw the lowest reading in 17 months, at 53.9.

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The long and short of the ISM reading is that new orders, production and employment are all still growing, at a time that supplier deliveries are slowing at faster rate and while order backlogs are growing.

"The construction sector's difficulties in recent months has clearly been influenced by economic, political and Brexit uncertainties fuelling clients' caution over committing to new projects", said Howard Archer, chief economic advisor at EY ITEM Club.

Concerning future market conditions and the strength of global demand, some manufacturers expressed weakened confidence toward the year ahead, reflected by a Caixin/Markit PMI sub-index that dipped to a four-month low last month. In fact, the rate of expansion in purchasing activity quickened from March's eight-month low. The strongest expansions were registered in the Netherlands, Austria and Germany, and the weakest in Spain.

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He added that "price data suggests that inflationary pressures, which stem from United States dollar strength, subsided slightly as input cost inflation softened from one month earlier and now settled below the historical average".

The index remained above the 50 threshold that separates expansion from contraction for the 19th consecutive month and reached the highest in six months.

Meanwhile, divergences were recorded for both pre- and post-production stocks. The rate of growth in output was solid overall and the fastest since January.

"Encouragingly, PMI data highlighted inflationary pressures moderated for the second month in a row, with input cost and output charge inflation at the weakest since September 2017 and July 2017 respectively".

"Business sentiment was at the strongest level seen since the implementation of the Goods and Services Tax in July 2017, driven by expectations that underlying demand will improve further over the next 12 months, and subsequently firms reported a renewed increase in job recruitment".

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