Conflicting signals from manufacturing and services confidence indicators

On the manufacturing front, the situation is still negative, likely reflecting the lingering problems related to the unresolved trade dispute between the US, China, and Europe, to which the car manufacturing Italian supply chain is clearly exposed. In March both the manufacturing business confidence and the relevant PMI continued contracting, driven by a deterioration in order books. Both indicators reported an improvement in the consumer goods component and a softening in the intermediate and investment goods components. According to the PMI report, softer manufacturing activity was accompanied by a marginal decline in employment; this might possibly suggest that businesses have not yet drawn their conclusion on whether the current soft patch is here to stay or not.