May 4, 2020 / 7:54 AM / 25 days ago

Italy's factory activity contracts at fastest rate on record - PMI

FILE PHOTO: A worker welds in a factory in Gravellona Lomellina, 45km (27 miles) southwest of Milan, Italy, June 11, 2013. REUTERS/Stefano Rellandini/File Photo

ROME (Reuters) - Italian manufacturing activity shrank in April at the steepest rate in more than 22 years, hit by a lockdown to try to contain the new coronavirus outbreak, a survey showed on Monday.

The IHS Markit Purchasing Managers’ Index (PMI) dropped to 31.1 from 40.3 in March and 48.7 in February.

The latest index level was the lowest since IHS Markit launched its survey in June 1997, plummeting far below the 50 mark that separates growth from contraction.

Analysts had expected an even weaker figure, with the median forecast in a Reuters survey pointing to 30.0.

IHS Markit said its subindexes for output at manufacturers and for new orders both also posted their lowest readings since the start of the series.

Italy was in lockdown through all of April, with all firms shuttered except those deemed essential for the supply chain. From Monday, the restrictions are being gradually lifted.

The economy shrank by 4.7% in the first quarter from the previous three months, national statistics bureau ISTAT reported on Thursday, 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 Hugh Lawson

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