FX.co ★ Italian Factory Activity Contracts Faster in June

The HCOB Italy Manufacturing PMI decreased to 48.4 in June 2025, down from 49.2 in May, marking the 15th consecutive month of contraction and representing the fastest decline in three months. The ongoing drop in new orders led to a further reduction in output levels. The contraction in production was notably significant, primarily due to sluggish demand from both domestic and international markets. Consequently, companies scaled back their purchasing and hiring activities, while also reducing their pre-production inventories. In parallel, inflationary pressures eased in June, evidenced by declines in both input costs and output prices. Supplier discounts were mostly passed on to customers as businesses sought to retain their competitive edge. Lastly, while output expectations among Italian manufacturers remained optimistic in June, confidence dipped to its lowest point since last November amid global economic uncertainties and weakened customer demand.