Italy’s manufacturing confidence index rose to 89.6 in July 2026, its highest level since June 2023, up from 88.6 in June, signaling a broad-based improvement in business sentiment. Firms reported a less negative assessment of total orders (-16.5 vs -19.3), driven in part by better views on foreign orders (-21.9 vs -24.5). Assessments of current production also strengthened slightly (-15.0 vs -15.7), though they remained in negative territory, and were accompanied by a further buildup in inventories (2.7 vs 1.4).
Looking ahead, production expectations improved (3.5 vs 1.8), while inflation expectations declined sharply (15.3 vs 22.0), indicating easing cost pressures. Labor market sentiment rebounded markedly, with the employment indicator climbing to 4.4 from -1.8.
At the broader level, Italy’s overall business confidence inched up to 95.6 from 95.3, supported by stronger sentiment in market services and retail trade, even as confidence in the construction sector weakened.
