FILE PHOTO: Milan’s business district skyline is seen from Duomo’s Cathedral downtown Milan, Italy , January 13, 2016. REUTERS/Stefano Rellandini/File Photo
ROME (Reuters) – Growth in Italy’s manufacturing sector gathered speed in February, helped by a rise in output and a return to expansion of new orders as inflation fears recede, a survey showed on Wednesday.
The S&P Global (NYSE:SPGI) Purchasing Managers’ Index (PMI) for Italian manufacturing came in at 52.0, up from 50.4 the month before and above the 50 mark that separates growth from contraction.
The reading was also above the median forecast of 51.0 in a Reuters survey of 16 analysts.
The manufacturing output sub-index climbed to 54.0 from 51.0 in January, its highest level in a year, while the new orders indicator rose to 51.1 from a previous 48.3, its best reading since last April.
Growth in the sector reflected an upswing in demand, which is showing better-than-expected resilience as inflation and recession fears lessen and supply constraints ease, said Paul Smith, economics director at S&P Global Market Intelligence.
“Reflective of growing optimism about prices, input costs fell for the first time since June 2020, with energy and general commodity prices reported to be lower compared to the start of the year,” Smith said.
“Confidence about the future, combined with rising production requirements meant that firms added to their payroll numbers to the greatest degree since March last year,” he added.
The euro zone’s third-largest economy grew by 3.9% last year, despite contracting by 0.1% in the fourth quarter from the previous three months, data showed last month. The government forecasts a sharp slowdown in growth to 0.6% for 2023.