Tuesday, October 01 09:17:22
Italian manufacturing activity expanded for the third month running in September as new orders and output increased, though at a slower pace than the previous month, a survey showed today.
The data adds to signs that the euro zone's third-largest economy may soon emerge from its longest post-war recession, which began in mid-2011. But any recovery is likely to be slow and fragile.
Italy is once more in political chaos, with Prime Minister Enrico Letta battling to stay in office after centre-right leader Silvio Berlusconi withdrew his party's five ministers from the government.
The Markit/ADACI Purchasing Managers Index fell back to 50.8 in September from 51.3 in August, slightly below the average forecast of 51.0 in a Reuters survey of analysts but holding above the 50 mark that separates growth from contraction.
The manufacturing sector accounts for about 19 percent of Italian economic output, according to statistics office ISTAT. Variations in industrial output normally have a close correlation with gross domestic product.
Production levels rose for the fourth month in a row in September, the survey showed, but the sub-index measuring output fell back towards the 50 break-even line, registering 52.9 after August's 28-month high of 54.4.
New orders rose for the third straight month, but also at a significantly slower pace than in August.
Italy has posted eight consecutive quarters of economic contraction and in inflation-adjusted terms the economy is now smaller than it was at the end of 2001.
While the manufacturing PMI and business confidence data have both posted gains, the most recent official industrial output figures published by national statistics office ISTAT showed a surprise 1.1 percent fall in July.
Most analysts expect modest economic growth in the last quarter of 2013, but forecast a decline in output for the whole year of around 1.8 percent, following the 2.4 percent GDP drop in 2012.
Despite the gradual turnaround in output, the PMI survey showed manufacturers shed jobs in September for the 26th month in a row, albeit at a marginally slower pace than the previous month.
Italy's jobless rate, at 12 percent in July, has eased slightly from May's record high, but youth unemployment is still rising and stands at almost 40 percent. ( C ) Reuters