Tue, 29 Sep 2020

ROME, Aug. 3 (Xinhua) -- Italy's manufacturing activity showed a 25-month record high in July, according to a survey released on Monday.

The IHS Markit Purchasing Managers' Index (PMI) grew to 51.9 points last month from 47.5 in June (and 45.4 in May), the highest level recorded since June 2018.

A PMI index above 50 points is a sign of economic growth, whereas one below 50 indicates contraction.

Included in a report by global consulting firm IHS Markit on the whole eurozone manufacturing, the latest data on Italy suggest the third-largest economy in the area might be on the way to recover, after the restrictions to economic activities imposed by Italian authorities to curb the COVID-19 pandemic.

All factories -- but for those linked to essential services such as food industry, pharmacies, and transports -- were ordered to stop from March 10 to May 4 in an effort to help avoid the spread of the coronavirus.

As the lockdown badly hit production, the country's PMI index fell to a record low of 31.1 in April.

The positive result in July was largely due to higher production levels, which rose for the second month in a row and at the fastest rate since March 2018, and new orders, according to the report.

The increase in the PMI Index signaled "an overall improvement in the health of the Italian manufacturing economy," the IHS Markit said.

However, the survey also showed foreign demand for Italian products remained "a source of weakness" with orders decreasing in July for the 15th consecutive month, although at the slowest pace since January.

"It is essential that demand conditions continue to improve, and any reintroduction of lockdown measures due to a 'second wave' of the pandemic has the potential to derail the recovery," Lewis Cooper, economist with IHS Markit, said in a short comment to the latest survey.

At eurozone level, the report showed business confidence on economic perspectives in the next 12 months kept growing in July, with firms "hoping that the recent positive trends in activity and new work will continue with a broader recovery from the pandemic."

Italy's gross domestic product (GDP) plunged by 12.4 percent in the second quarter of 2020 compared to the previous three months, due to the COVID-19 emergency, and by 17.3 percent against the same quarter of last year, a preliminary estimate by the National Institute of Statistics (ISTAT) showed on Friday.

The IHS Markit Eurozone Manufacturing PMI is based on original survey data collected among about 3,000 companies, and includes national data for Italy, Germany, France and other countries in the area, according to the firm.

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