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Italian Factory Sector Contracts For Eighth Month

Activity in the Italian manufacturing sector continued to decrease in March, data from a survey by Markit Economics and ADACI showed Monday.

The purchasing managers' index (PMI) for the manufacturing sector came in at 47.9 in March. The reading was broadly unchanged from February's 47.8, and indicated contraction in the sector for the eighth consecutive month. A PMI reading below 50 indicates decline, while one above suggests growth.

Production in Italian factories decreased at the slowest pace since October 2011. The slowdown was supported by efforts to catch up on work disrupted by February's unusually bad weather. New business received by firms decreased sharply in March. The rate of fall accelerated from the February levels, and extended the current sequence of contraction to ten months.

Italian manufacturers continued to reduce their workforce in March, extending the current period of job losses to eight months. The rate of fall in employment was faster than in the previous month.

Input price inflation was slightly weaker than February's nine-month high. However, manufacturers generally kept output prices unchanged over the month.

"Italy's manufacturing PMI index trended sideways in March, remaining in negative territory for the eighth month in a row," Phil Smith, economist at Markit, said. "Both anecdotal evidence and a first rise in new export orders since last July indicated that weakness in the sector stemmed from a further deterioration in domestic market conditions."

by RTT Staff Writer

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