Italian Factory Sector Returns to Contraction

The HCOB Italy Manufacturing PMI fell to 49 in September 2025, from 50.4 in August and below market expectations of 50, highlighting renewed weakness in the Italian manufacturing sector. The latest downturn was the steepest in three months, fueled by renewed declines in production and new orders linked to global economic uncertainty. Exports also waned, highlighting a slowdown in international demand, particularly in key markets across Europe, the US, and Asia. As a result, companies reduced their purchasing activity at a notably faster rate in September. More positively, employment rebounded after 11 consecutive months of job reductions, reportedly driven by planned investment in expanding business operations. On the price front, cost pressures intensified, with input prices—particularly for raw materials like copper—rising sharply, while selling prices remained largely unchanged due to competition and efforts to boost sales. Lastly, business sentiment improved in September.