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Italian output sees 15 months of decline

Friday, November 02 09:17:32

Italian manufacturing activity shrank for the 15th month running in October, and at a slightly sharper rate than the month before, as a slide in output and employment accelerated, a survey showed today. The data suggests the euro zone's third-largest economy is struggling to emerge from a deep recession that began in mid-2011 and has been accentuated by austerity measures aimed at reining in Italy's massive debt. The Markit/ADACI Purchasing Managers Index fell to 45.5 in October from 45.7 in September, slipping further below the 50 mark that separates growth from contraction. A Reuters survey of 15 analysts had pointed to a slightly sharper fall to 45.3, with forecasts ranging from 44.8 to 47.1.

The Italian economy, the most sluggish in the euro zone for more than a decade, shrank by 0.8 percent in both the first and second quarters of this year. The government expects a full-year contraction of 2.4 percent. Austerity measures introduced by Prime Minister Mario Monti after he took over from Silvio Berlusconi in November last year have included tax hikes, spending cuts and pension reform and have weighed heavily on consumers and businesses.

The PMI data showed factory output fell for the 13th month running, with the sub-index slipping to 44.7 from 45.5. Job shedding in the sector accelerated in October, through redundancies and attrition, where firms choose not to replace voluntary leavers and staff on temporary contracts. Input prices rose for the second month in a row, while the pace of decline in output prices eased. While domestic demand remained weak, export orders rose for the first time since March, helped by increased sales to the United States and Russia, Markit said. ( C) Reuters