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Italy's Manufacturing Downturn Eases In May

Italy's manufacturing activity downturn eased in May as coronavirus, or Covid-19, restrictions loosened, survey data from IHS Markit showed Monday.

The manufacturing Purchasing Managers' Index advanced notably to 45.4 in May from 31.1 in April. The score was also above economists' forecast of 37.1.

However, the survey signaled a twentieth consecutive monthly deterioration in the health of the manufacturing sector.

Driving the latest contractions were further falls in both output and new orders. Although the pace of decrease in order book volume eased from the record fall in April, the contraction was among the fastest since mid-2009.

Meanwhile, firms continued to cut staff numbers in May, with the rate of job shedding the second quickest since mid-2009.

Driven by falling oil and raw material costs, cost burdens decreased further in May. Firms continued to discount selling prices to attract customers.

Finally, Italian goods producers remained confident with regards to output over the coming 12 months in May.

Although latest figures highlighted a softer rate of deterioration, conditions across the sector remain extremely challenging as firms struggle to revive demand both domestically and abroad, Lewis Cooper, an economist at IHS Markit said. A recovery from such a colossal downturn will inevitably take some time.

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