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Investing.com -- Italy’s manufacturing sector showed signs of stabilization in October, with the HCOB Italy Manufacturing PMI rising to 49.9 from 49.0 in September, just below the 50.0 threshold that separates growth from contraction.
Production volumes increased marginally despite a fractional decline in new orders, according to data collected between October 9-24. Business confidence among manufacturers improved to its strongest level in 14 months, with over half of surveyed firms anticipating higher output in the coming year.
The mixed trends beneath the headline figure showed growth in output and longer supplier delivery times being offset by contractions in new orders, employment, and stocks of purchases.
New orders decreased only fractionally in October, with manufacturers citing macroeconomic uncertainty and reduced interest from clients in France and Germany. Despite this, output volumes rose slightly, which companies attributed to new customer intakes and some higher sales.
Input cost inflation accelerated to a seven-month high, driven by rising raw material prices and shipping fees. Despite these cost pressures, manufacturers reduced their selling prices in an effort to stimulate demand amid strong competition, with the rate of discounting reaching an eight-month high.
Employment edged lower, though this was primarily due to voluntary departures and contract expirations rather than redundancies. Firms continued to reduce their backlogs of work at a sharp pace, indicating that production capacity exceeded incoming workloads.
"October’s PMI data suggest that Italy’s manufacturing sector may be approaching a turning point," said Nils Müller, Junior Economist at Hamburg Commercial Bank. "Although the sector remains in mild contraction, a notable improvement in business confidence hints at a shift in momentum."
Manufacturers expressed optimism about the next 12 months, citing expectations of new client wins, stronger order inflows, and upcoming product launches as reasons for their positive outlook.
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