As Italy emerged from its lockdown to try to contain one of the world’s worst coronavirus outbreaks, the country’s manufacturing activity shrank in May for the 20th month running but much less steeply than the previous month.
From 31.1 in April, the IHS Markit Purchasing Managers’ Index (PMI) rebounded to 45.4, remaining well below the 50 mark that separates growth from contraction. Nine analysts had pointed to 37.0 as the median forecast in a survey.
Reading in April was the lowest since 1997 when IHS Markit launched its survey. It indicates the shut down of all factories not deemed essential to Italy’s supply chain. IHS Markit’s sub-index jumped from April’s record low of 11.4 to 47.5 in May for output at manufacturers. This indicates another production decline but a much less steep one.
Italy’s economy shrank by 5.3 percent in Q1 from the previous quarter. This is the steepest fall in the GDP since ISTAT’s current series began in 1995. A full-year GDP decline of 8 percent predicted by the centre-left Democratic Party and the government of the anti-establishment 5-Star Movement.
