FX.co ★ Italian Factory Sector Returns to Contraction

The HCOB Italy Manufacturing PMI dropped to 49 in September 2025, down from 50.4 in August, falling short of market predictions of 50. This decline signals renewed challenges within the Italian manufacturing sector. It marks the most significant downturn in three months, spurred by fresh declines in both production and new orders amid global economic uncertainty. The contraction in exports underscores a deceleration in international demand, notably affecting major markets in Europe, the US, and Asia. On a brighter note, the sector saw a rebound in employment following 11 months of job reductions, attributed to planned investments in expanding business activities. On the pricing front, cost pressures escalated, with input costs—especially for raw materials like copper—experiencing a substantial surge. However, selling prices largely remained unchanged due to competitive market conditions and strategies aimed at boosting sales.