Italy’s manufacturing sector eased towards stagnation in August, survey data from IHS Markit showed Monday.
The headline Purchasing Managers’ Index, or PMI, dropped to 50.1 in August from 51.5 in July. However, any reading above 50 indicates expansion in the sector.
Moreover, the latest PMI reading was the lowest in two years.
Among components, both output and new orders declined, undermined by weak domestic demand.
Despite this, manufacturers raised their staffing levels in August, generally as part of wider company expansion plans. But, the rate of job creation was the weakest in nearly two years.
On the price front, input price inflation eased to a 3-month low in August, though remained elevated. Meanwhile, output prices rose at a modest and noticeably slower rate.
“Unless we see a pick-up in demand – be it from at home or abroad – the recent trends in the data raise the spectre of the sector tipping into technical recession during the second half of 2018,” Paul Smith, Economics Director at IHS Markit, said.