In May 2025, the HCOB Italy Manufacturing PMI decreased slightly to 49.2 from April's figure of 49.3, signaling a modest contraction in manufacturing activities. Despite this, output increased for the first time in over a year, driven by a slight upturn in export demand, mainly from Europe. However, new orders continued to decline for the 14th consecutive month, although the rate of decline was the slowest recorded in over a year. Employment saw another downturn, albeit at a slower rate, while purchasing activities and inventories reduced due to tepid domestic demand.
Regarding pricing, input costs experienced a significant fall—the steepest since early 2024—as a result of decreased raw material prices, yet output prices remained unchanged. Additionally, suppliers were able to deliver more quickly, with delivery times improving at the fastest pace in a year.
Looking forward, business confidence has increased, as firms anticipate that better market conditions, reduced inflation, and possible rate cuts by the European Central Bank (ECB) could foster growth. Nonetheless, ongoing trade tensions continue to pose a significant risk to the outlook.
