Italy factory activity contracts in December at steepest rate since 2013 - PMI

ROME (Reuters) - Italian manufacturing activity declined for a 15th month running in December and at the steepest rate for almost seven years, a survey showed on Thursday, suggesting the economy will continue to struggle in the near term.

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

The IHS Markit Purchasing Managers’ Index (PMI) fell to 46.2 from 47.6 in November, falling further below the 50 mark that separates growth from contraction and posting the lowest reading since April 2013.

A Reuters survey of analysts had pointed to a reading of 47.2.

IHS Markit said its sub-index for new orders at manufacturers declined to 45.8 from 46.7, while the sub-indexes for manufacturing output and employment both dropped to multi-year lows.

The euro zone’s third-largest economy has been broadly stagnant for the last seven quarters, and economists say gross domestic product growth in 2019 was probably only around 0.2%.

A long-running slump in manufacturing has been offset by relative strength in the service sector, staving off a full-blown recession.

The government forecasts a modest acceleration in GDP growth to around 0.6% this year.

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Reporting by Gavin Jones, editing by Hugh Lawson