Italy's Biz Index in a Small, Unconvincing Rebound

The ISAE business index did improve slightly in October from September. But the index, as well as its momentum, remain solidly in a down trend… The ISAE business survey components tell a tale of a sector that is fading. For overall industry the total order books and demand responses are at the 50% mark market and are dead neutral. Domestic and foreign demand are each rated a tick or so above neutral. Inventories are soaring and high. Production, as result, is below neutral at a reading of 49. The detail shows a story that has become old hat for the Euro area. The weakness is in intermediate goods and in consumer goods. Intermediate goods readings are below the 50% mark for the most part while consumer goods ratings cluster in the BOTTOM THIRD of their respective ranges. The sense of firmness that the overall measure retains is a function totally of capital goods where readings remains elevated at about the top third of their respective ranges with the notable exception of foreign orders for capital goods that are now little better that neutral. Cleary Italy is flashing some warning signals. The Euro area PMI for MFG was doing much the same today.