Italy's factory activity contracts by less than expected in May: PMI - Metro US

Italy’s factory activity contracts by less than expected in May: PMI

The coronavirus disease (COVID-19) outbreak in Collegno

ROME (Reuters) – Italian manufacturing activity shrank in May for the 20th month running but much less steeply than the month before, a survey showed on Monday, as Italy emerged from its lockdown to try to contain one of the world’s worst coronavirus outbreaks.

The IHS Markit Purchasing Managers’ Index (PMI) rebounded to 45.4 from 31.1 in April, remaining well below the 50 mark that separates growth from contraction.

The data was considerably less weak than expected. The median forecast in a Reuters survey of nine analysts had pointed to 37.0.

April’s reading was the lowest since IHS Markit launched its survey in 1997, reflecting the closure of all factories not deemed essential to the country’s supply chain. Plants were allowed to reopen in May.

IHS Markit’s sub-index for output at manufacturers jumped to 47.5 in May from a record low of 11.4 in April, indicating another fall in production but a much less steep one.

The euro zone’s third-largest economy shrank by 5.3% in the first quarter from the previous three months, statistics bureau ISTAT reported on Friday, the steepest fall in gross domestic product since ISTAT’s current series began in 1995.

The government of the anti-establishment 5-Star Movement and the centre-left Democratic Party forecasts a full-year GDP decline of 8%.

(Reporting by Gavin Jones; Editing by Catherine Evans)

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