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Italy Dec manufacturing PMI highest since May '07

Published 01/03/2011, 03:45 AM
Updated 01/03/2011, 03:48 AM

ROME, Jan 3 (Reuters) - Italian manufacturing activity grew at its fastest rate in three and a half years in December and firms resumed hiring after months of job-shedding, a survey showed on Monday, auguring well for a firmer recovery in 2011.

The Markit/ADACI Purchasing Managers Index increased to 54.7 from 52.0, a much larger rise than forecast and reversing a surprise fall in November.

Output and new orders both jumped as the index moved comfortably away from the 50 threshold separating growth from contraction. The average forecast in a Reuters survey of analysts had pointed to only a modest rise to 52.5.

Manufacturers boosted their workforce in December at the fastest pace in more than four years, with the employment sub-index bouncing to 52.2 from 49.3 to hit its highest level since April 2007.

The survey shows Italian firms appear unfazed by the problems of Silvio Berlusconi's centre-right government, which narrowly survived a no-confidence vote last month but had its parliamentary majority cut to a precarious 3 votes.

Most recent official data from statistics bureau ISTAT showed manufacturing activity was still listless in October, with industry output slipping 0.1 percent after a 2.1 percent drop in September, and orders stagnant after a 1.2 percent fall.

Gross domestic product growth in the euro zone's third largest economy slowed to 0.3 percent in the third quarter of 2010 from 0.5 percent in the second.

The Bank of Italy forecasts full-year growth of around 1 percent this year, roughly the same as in 2010 and slightly below the government's official forecasts of 1.2 percent in 2010 and 1.3 percent this year.

REUTERS POLL: Consensus 52.5 (range 51.0-53.5, 5 participants)

(Reporting by Gavin Jones; Editing by Ruth Pitchford)

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