August data revealed falls in new orders, output and employment as manufacturers struggled in the face of a weak domestic economy," the Markit/Adaci report said. Economy Minister Giulio Tremonti has already said growth will be "around zero" this year, below the official government target of 0.5 percent, but pretty realistic as far as can be seen at this point. It all depends on Q4 , since the downside risk is that Q4 gives a bad result which puts whole year 2008 into negative territory.
The PMI survey showed that while the rate of decline in new orders, output and employment was slower than in recent months, the quantity of purchases fell at the fastest rate since November 2001, shortly after the attacks on the U.S. World Trade Center. Input price inflation eased to its slowest rate since May and output prices showed the slowest rate of increase since December last year.
Business Confidence Refuses To Budge
Unlike Consumer Confidence which rose slightly in August, Italian business confidence held stubbornly at its lowest level since the Sept. 11 terrorist attacks as the risk of recession and slumping consumer demand kept a tight grip on optimism among Italian manufacturers. The Isae Institute's business confidence index held at 83.5, matching last month which was the lowest reading since October 2001. And while some components rose slightly in August, others fell, including the all important the production outlook, which continued its decline, falling to 1 in August after slipping to 5 in the previous month. Which means, the PMI for September may very well offer us even more contraction.