On Monday, Bloomberg reported that Italian factories have been in a downturn for six months in a row, as a deep industrial recession marked by a continuing decline in manufacturing wears on the nation’s industrial sector, according to a survey by S&P Global.
In September, an index drawn from surveys of purchasing managers (PMI) came in at a reading of 46.8. In August it registered 45.4, declining further away from the midpoint reading of 50, which separates growth from contraction.
In Italy the manufacturing sector has been hard hit over the past several months by a weakening of global demand which has caused new orders to drop off.
Tariq Kamal Chaudhry, an economist at Hamburg Commercial Bank said, “The Italian industrial economy appears to be trapped in a deep recession with no clear way out. New orders, both domestic and international, are shrinking, and even expectations for future output have fallen well below their long-term average.”
While the PMI survey did point to a slight increase in factory employment, it also highlighted a shortage of skilled workers. The previous report by S&P noted that factories in Italy had begun to lay off workers as they saw a deeper contraction in industrial production.
For their part, economists predict that the recession in manufacturing, which began in the third-largest economy in the Eurozone last year, will not end anytime soon.
About 16% of the economic output of Italy is accounted for by manufacturing, however as the sector continues to lag, it is weighing on the broader economy, causing it to fall deeper into a contraction.
Current data shows that in the second quarter of the year, the nation’s economy declined by 0.4%, more than the 0.3% which economists had been expecting.