Italy Pmi For June Was 52 Lower Than Last Month Reading

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Italy Pmi For June Was 52 Lower Than Last Month Reading

Italy's PMI For June Was 52.2, Lower Than Last Month's Reading

For the month of June, Italy's service sector recorded growth, making it the 6th month in a row of consecutive growth. However, the data also shows that high-interest rates are affecting Italy's economic growth, which is the 3rd largest economy in Europe.

Italy's PMI reading for June was recorded at 52.2, which is lower than May's reading of 54.0. However, it remained above the 50 mark, signaling growth and not contraction. According to a survey of analysts, Italy's PMI reading was expected to be near 53, while the actual value was 0.8 points lower.

According to experts, the pace of growth will continue to slow down in the next few months. In fact, the fears of a recession may also become a reality as economic growth continues to shrink.

High-Interest Rates Remain A Burden

For now, the higher interest rates set by the ECB remain a burden for the Italian economy, which was already struggling. To put things into perspective, the interest rate in Italy is at a 22-year high, with yet another rate hike due at July's meeting.

Basically, all the components of the PMI survey showed signs of easing, with the new business indicator dropping to 52.9 from 55.4. At the same time, the business expectations also dropped from 64.2 to a value of 62.3.

The PMI survey for the small manufacturing sector in Italy also dropped to 43.8 from a value of 45.9 points in May. According to experts, that's one of the weakest readings for Italy's small manufacturing sector in 3 years.

According to Italy's authorities, the growth coming from the services sector will be strong enough to compensate for the slowdown in the manufacturing sector.

If we look elsewhere, it appears that slow manufacturing & services growth isn't a problem limited to Italy alone. China which is an economic powerhouse on its own is also struggling with the same!

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