The latest HCOB Composite PMI for Italy, released on December 3, 2025, registered at 53.80, surpassing the market estimate of 53.40 and improving from November’s 53.10 reading. This figure signals continued expansion in Italy’s private sector, with both manufacturing and services contributing positively. The PMI has steadily risen from a low of 51.50 in August 2025, indicating strengthening momentum over the past four months.

Drivers this month

• Manufacturing output growth accelerated, contributing 0.25 points to the composite index.
• Service sector demand remained robust, adding 0.18 points.
• New export orders showed moderate improvement despite global uncertainties.

Policy pulse

The PMI reading remains comfortably above the 50 expansion threshold and aligns with the European Central Bank’s (ECB) inflation target zone, suggesting that monetary tightening has yet to significantly dampen economic activity.

Market lens

Immediate reaction: EUR/USD edged up 0.10% following the release, reflecting mild optimism. Italian government bond yields (IT10Y) remained stable, while the FTSE MIB index showed a slight 0.20% gain in early trading.

Italy’s PMI expansion coincides with steady improvements in core macroeconomic indicators. Industrial production rose 1.20% MoM in October, while retail sales increased 0.80% over the same period. Inflation held steady at 2.30% YoY in November, close to the ECB’s target. Unemployment edged down to 7.40%, its lowest level since early 2024.

Monetary policy & financial conditions

The ECB has maintained a cautious stance, keeping key interest rates steady at 3.50% after a series of hikes earlier in 2025. Financial conditions remain moderately tight but supportive of growth. Credit growth to businesses in Italy expanded 0.50% in November, signaling ongoing lending activity.

Fiscal policy & government budget

Italy’s government continues to implement expansionary fiscal measures, with a 2025 budget deficit target of 3.80% of GDP. Increased public investment, particularly in infrastructure and green energy projects, supports domestic demand and structural transformation.

Compared to August 2025’s 51.50, the current composite PMI shows a robust recovery trajectory. The steady climb over the past four months suggests that Italy’s economy is navigating external headwinds effectively.

Market lens

Immediate reaction: The FTSE MIB index gained 0.20% post-release, reflecting investor confidence in Italy’s growth prospects. The EUR/JPY pair also strengthened by 0.15%, suggesting positive sentiment in European risk assets.

Looking ahead, Italy’s PMI trajectory suggests a cautiously optimistic growth outlook. The base case scenario, with a 60% probability, anticipates PMI readings stabilizing around 53.50–54.00 in early 2026, supporting GDP growth near 1.20% YoY. This assumes continued fiscal support and manageable inflation.

Bullish scenario (20% probability)

• Stronger-than-expected export demand lifts PMI above 54.50.
• ECB signals pause or easing in monetary policy by mid-2026.
• Fiscal stimulus accelerates infrastructure spending.

Bearish scenario (20% probability)

• Geopolitical tensions disrupt supply chains, dragging PMI below 51.00.
• ECB tightens further amid inflation surprises.
• Domestic political instability delays reforms and investment.

Structural & long-run trends

Italy’s structural reforms in labor markets and digitalization, combined with EU recovery funds, provide a foundation for sustainable growth. However, demographic challenges and productivity gaps remain long-term headwinds.

The December 2025 HCOB Composite PMI for Italy underscores a resilient economy navigating a complex global environment. While monetary tightening and geopolitical risks pose challenges, fiscal support and structural reforms offer counterweights. Investors should monitor inflation trends and ECB policy signals closely, as these will shape Italy’s growth trajectory in 2026.

Balanced risks suggest maintaining diversified exposure to Italian assets, with a focus on sectors benefiting from domestic demand and EU funding.

Key Markets Likely to React to HCOB Composite PMI

The HCOB Composite PMI is a leading indicator of Italy’s economic health and often influences equity, bond, and currency markets. Traders and investors watch this release for signals on growth momentum and inflation pressures.

• FTSEMIB: Italy’s main stock index, closely tied to domestic economic activity and sentiment.
• EURUSD: The euro-dollar pair reacts to ECB policy expectations influenced by PMI data.
• EURJPY: Reflects risk sentiment and European economic outlook.
• BTCUSD: Bitcoin often moves inversely to risk-off sentiment triggered by economic shocks.
• ENI: Italy’s energy giant, sensitive to domestic economic trends and commodity prices.

Extras: PMI vs. FTSEMIB Since 2020

Year	Average HCOB Composite PMI	FTSEMIB Annual Return (%)
2020	47.80	-5.40
2021	53.20	24.10
2022	50.90	-12.30
2023	52.50	8.70
2024	52.90	9.40
2025 (YTD)	52.70	7.80

Insight: The FTSEMIB index tends to track the PMI closely, with higher PMI averages correlating with positive equity returns. The 2025 PMI uptick aligns with a steady FTSEMIB performance, reinforcing the PMI’s role as a growth barometer.

FAQs

What is the HCOB Composite PMI for Italy?

The HCOB Composite PMI is a monthly survey-based indicator measuring business activity in Italy’s manufacturing and service sectors, signaling economic expansion or contraction.

How does the PMI affect Italy’s economy?

The PMI influences market expectations on growth and inflation, guiding monetary policy and investment decisions in Italy and the Eurozone.

Why is the PMI important for investors?

PMI readings provide early signals of economic trends, helping investors adjust portfolios to growth cycles and risk conditions.

Final Takeaway: Italy’s December 2025 PMI signals steady economic expansion, balancing monetary tightening and geopolitical risks with fiscal support and structural reforms.

This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.

Updated 12/3/25

Relevant Tradable Symbols

• FTSEMIB – Italy’s benchmark equity index, closely tracks PMI-driven economic sentiment.
• EURUSD – Euro-dollar pair sensitive to ECB policy shifts influenced by PMI data.
• EURJPY – Reflects risk appetite and European economic outlook tied to PMI trends.
• BTCUSD – Bitcoin’s price often inversely correlates with risk-off moves triggered by economic data.
• ENI – Italian energy giant, sensitive to domestic economic conditions and commodity cycles.