Factories in Italy have been experiencing a downward trend for six consecutive months, highlighting a persistent decline in the country’s manufacturing sector, according to a survey by S&P Global, cited by Bloomberg. The survey measured an index based on responses from purchasing managers, which stood at 46.8 in September compared to 45.4 in August, indicating a contraction as it remains below the mark of 50.
The Italian industry, particularly manufacturing, has been grappling with challenges in recent months due to a decrease in new orders as global demand weakened. This has led to a deep industrial recession from which there seems to be no immediate escape. Tariq Kamal Chaudhry, an economist at Hamburg Commercial Bank, stated, “The Italian industrial economy appears to be trapped in a deep recession with no clear way out. New orders, both domestic and international, are shrinking, and even expectations for future output have fallen well below their long-term average.”
Although the survey suggested a slight increase in factory employment, it primarily highlighted the scarcity of skilled workers. This is in contrast to the previous report by S&P, which stated that Italian factories had started laying off staff due to a more profound contraction in industrial production.
Economists anticipate that the manufacturing recession, which began in Italy – the Eurozone’s third-largest economy – in the middle of last year, will continue. The manufacturing sector accounts for approximately 16% of Italy’s output, and its current weakness continues to weigh on the overall economy, pushing it further into contraction.
Recent estimates revealed that the country’s economy contracted by 0.4% in the second quarter of this year. Although this figure surpassed the predicted 0.3% contraction, it still signifies a worrisome trend for Italy’s economic performance.
Italy’s manufacturing sector’s struggles have broader implications for its economy as a whole. The ongoing decline underscores the need for comprehensive efforts to revitalize the sector and stimulate economic growth. As manufacturing plays a significant role in Italy’s output, any sustained weakness in this sector can have far-reaching consequences.
In conclusion, Italy’s manufacturing sector has been experiencing a prolonged contraction, evident in the latest survey by S&P Global. The decline, which has persisted for six consecutive months, is a reflection of the country’s deep industrial recession. Challenges such as a lack of new orders and weakening global demand have contributed to this downturn. Additionally, the shortage of skilled workers poses a further obstacle to the recovery of the manufacturing sector. The implications of this decline extend beyond manufacturing, with the overall economy being dragged into further contraction. Urgent measures are needed to address these challenges and revitalise Italy’s manufacturing sector to drive economic growth.
Source link
