Factories in Italy have started laying off employees as the country’s manufacturing sector continues to contract. According to data from the Composite Purchasing Managers’ Index (PMI) compiled by S&P Global, Italy’s economy slid to 45.4 in August, indicating a contraction and highlighting the deepening recession.
The struggling Italian manufacturing industry has been facing challenges in recent months due to a lack of new orders and weakened global demand. Economist Tariq Kamal Chaudhry from Hamburg Commercial Bank expressed concerns regarding the manufacturing recession, which started in the middle of last year and shows no signs of improvement. He pointed out that overall orders are being affected, particularly due to a decline in overseas demand.
The weakness in the manufacturing sector has had a significant impact on the Italian economy as a whole. The latest estimates revealed that the country’s economy shrank by 0.4% in the three months through June, exceeding the previously predicted contraction of 0.3%. This decline in economic growth further emphasizes the challenges faced by the manufacturing industry.
In addition to the contraction in the manufacturing sector, Italy’s labor market is also under pressure. S&P Global stated that job losses were recorded for the first time in three years, with several companies indicating that they were not replacing employees who left their plants. This trend is a concerning sign for the labor market and adds to the economic challenges faced by the country.
Official statistics show that unemployment in Italy rose to 7.6% in July, with a total of 73,000 jobs lost. These numbers highlight the impact of the weak manufacturing sector on job creation and overall labor market conditions. The combination of a contracting manufacturing sector and rising unemployment underscores the challenges faced by the Italian economy.
Overall, the manufacturing recession in Italy, which began last year, shows no signs of abating. The lack of new orders and weakened global demand continue to hamper the industry, leading to factory layoffs and a contracting economy. The negative effects are also evident in the labor market, with job losses recorded for the first time in three years. As Italy grapples with these economic challenges, it is crucial for policymakers to address the weaknesses in the manufacturing sector and take measures to stimulate economic growth and job creation.