Italy factory activity growth weakest in May since Nov 2016

[ROME] Growth in Italian manufacturing activity eased in May to its weakest rate in 18 months, a survey showed on Friday, suggesting growth in the euro zone's third-biggest economy may slow in coming months.

The Markit/ADACI Purchasing Managers Index dropped in May to 52.7 from 53.5 in April, still above the 50 mark that separates growth from contraction but its lowest since November 2016.

May's index was slightly below the consensus forecast in a Reuters survey of 12 analysts which had pointed to 52.9.

Italy has been in political limbo since an inconclusive election three months ago that saw strong performances by anti-establishment and far-right parties at the expense of their mainstream rivals.

The sub-index for new orders at manufacturers dropped in May to 51.4 from 52.2, Markit said, the lowest level since October 2016.

Many other sub-indexes, including output and employment, also weakened, and export orders posted their lowest reading since August 2016.

The outgoing government of caretaker Prime Minister Paolo Gentiloni forecasts economic growth of 1.5 per cent in 2018, in line with last year's rate, which was the strongest since 2010.

REUTERS